HLIB Research upgrades Maxis to Hold, raises target price to RM6.74

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KUALA LUMPUR (Nov 14): Hong Leong IB Research (HLIB) has upgraded Maxis Bhd to a Hold (from Trading Sell) with a higher target price of RM6.74 (from RM5.95) and said there were signs of fruitful transformation as operational data showing some reversals especially in prepaid segment, whereby year-to-date core net profit of RM1.44 billion was within expectations.

In a note Friday, the research house said Maxis declared a third interim single-tier tax-exempt dividend of 8 sen per share (3Q13: 8sen), ex-date on Nov 26.

HLIB said service revenue was flat quaretr-on-quarter breaking the six consecutive quarterly declines since 1Q13.

“Prepaid gained momentum led by #Hotlink as sub base registered a first time net add after 5 continuous quarterly attrition along with ARPU expansion to RM35.

“Internet remains the main growth driver for mobile revenue, cushioning its cannibalisation effects on SMS and WBB’s slowdown.

“Upgrade from Trading Sell to Hold after raising our fair value by 13.3% from RM5.95 to RM6.74 as we rolled over our valuation to FY16,” it said.