Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Neutral on DIGI.COM BHD [] based on target price of RM23.10. It said on Thursday, April 1 that valuation-wise, the stock trades at 16.4x FY10 earnings, at the higher end of its regional peers. The key share price re-rating catalysts going forward are capital management and better than expected results. OSK Research said DiGi had ingeniously customised its iPhone packages to cater for a larger addressable market of potential iPhone users. "Overall, we believe its plans are attractive and would entice existing 2G/3G subscribers to upgrade or recontract their plans and stoke interest among current users of alternative smartphones and regular 2G/3G handsets," it said. DiGi's entry level iPhone plan (iDigi88) comes with a monthly access of RM88, which is lower than Maxis' RM100 (IV1 plan). It is also offering two other plans, priced at RM138 and RM238, which competes with Maxis' RM155 and RM255 packages. DiGi is making the iPhone more affordable by lengthening the lock-in period to 36 months versus the maximum 24 months for Maxis. An "all-in-one" monthly extended package (handset inclusive), allows the cost of the handset to be "defrayed' over an additional 12 months via an easy payment scheme with 0% interest. "On a like for like comparison, (based on the 24-month contract), our calculation suggests that the effective monthly commitment is 4%-9% lower for Digi. We note that DiGi fully subsidises the older 3G 8GB model for its top tier plan," it said.
Company Name: DIGI.COM BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Neutral on DIGI.COM BHD [] based on target price of RM23.10. It said on Thursday, April 1 that valuation-wise, the stock trades at 16.4x FY10 earnings, at the higher end of its regional peers. The key share price re-rating catalysts going forward are capital management and better than expected results. OSK Research said DiGi had ingeniously customised its iPhone packages to cater for a larger addressable market of potential iPhone users. "Overall, we believe its plans are attractive and would entice existing 2G/3G subscribers to upgrade or recontract their plans and stoke interest among current users of alternative smartphones and regular 2G/3G handsets," it said. DiGi's entry level iPhone plan (iDigi88) comes with a monthly access of RM88, which is lower than Maxis' RM100 (IV1 plan). It is also offering two other plans, priced at RM138 and RM238, which competes with Maxis' RM155 and RM255 packages. DiGi is making the iPhone more affordable by lengthening the lock-in period to 36 months versus the maximum 24 months for Maxis. An "all-in-one" monthly extended package (handset inclusive), allows the cost of the handset to be "defrayed' over an additional 12 months via an easy payment scheme with 0% interest. "On a like for like comparison, (based on the 24-month contract), our calculation suggests that the effective monthly commitment is 4%-9% lower for Digi. We note that DiGi fully subsidises the older 3G 8GB model for its top tier plan," it said.
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