Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Research House: HWANGDBS
Axiata Group Bhd
(March 22, RM4.77)
Maintain buy at RM4.79 with target price RM5.60: Axiata has a dividend policy of a minimum 30% payout, translating to about 2% yield. As its balance sheet strengthens (project Axiata to turn net cash in FY12) and operating cash flow improves, higher dividends could surprise the market. We project a 35% payout ratio as we believe that the group would be able to pay more dividends given the expected more than sufficient free cash flows over the next two to three years.
In 2011, Axiata is looking at Robi, Bangladesh, to grow (its revenue) in high teens to low 20s, Dialog, Sri Lanka, in the mid-teens, XL, Indonesia, high single-digit to low teens and Celcom, Malaysia, mid-single digits. Except for Dialog, other subsidiaries are targeted to perform ahead of the industry.
Celcom and XL will continue to grow mobile data services while remaining cost efficient. Robi will continue to improve service quality and offerings, while Dialog will continue to focus on growing its data services revenue and while managing cost efficiencies.
On the back of these, we expect FY11F revenue to grow by 10% while earnings before interest, tax, depreciation and amortisation (Ebitda) margin should remain stable at 49%.
Trading at only 13.5 times FY11F earnings per share, Axiata is the cheapest Malaysian telco in our coverage. The market has yet to recognise the full potential of Axiata as the fastest growing major telco in Malaysia. Maintain 'buy' with a sum of parts-derived target price of RM5.60. ' HwangDBS Vickers Research, March 22
This article appeared in The Edge Financial Daily, March 23, 2011.
Company Name: AXIATA GROUP BERHAD
Research House: HWANGDBS
Axiata Group Bhd
(March 22, RM4.77)
Maintain buy at RM4.79 with target price RM5.60: Axiata has a dividend policy of a minimum 30% payout, translating to about 2% yield. As its balance sheet strengthens (project Axiata to turn net cash in FY12) and operating cash flow improves, higher dividends could surprise the market. We project a 35% payout ratio as we believe that the group would be able to pay more dividends given the expected more than sufficient free cash flows over the next two to three years.
In 2011, Axiata is looking at Robi, Bangladesh, to grow (its revenue) in high teens to low 20s, Dialog, Sri Lanka, in the mid-teens, XL, Indonesia, high single-digit to low teens and Celcom, Malaysia, mid-single digits. Except for Dialog, other subsidiaries are targeted to perform ahead of the industry.
Celcom and XL will continue to grow mobile data services while remaining cost efficient. Robi will continue to improve service quality and offerings, while Dialog will continue to focus on growing its data services revenue and while managing cost efficiencies.
On the back of these, we expect FY11F revenue to grow by 10% while earnings before interest, tax, depreciation and amortisation (Ebitda) margin should remain stable at 49%.
Trading at only 13.5 times FY11F earnings per share, Axiata is the cheapest Malaysian telco in our coverage. The market has yet to recognise the full potential of Axiata as the fastest growing major telco in Malaysia. Maintain 'buy' with a sum of parts-derived target price of RM5.60. ' HwangDBS Vickers Research, March 22
This article appeared in The Edge Financial Daily, March 23, 2011.
No comments:
Post a Comment