Maxis: Watch out for weaker 2H earnings Underweight

We downgrade our recommendation on Maxis to UNDERWEIGHT from HOLD with a lower DCF-derived fair value of RM5.45/share (from an earlier RM5.65/share), based on a WACC discount rate of 6.4% and a terminal growth rate assumption of 2%, implying an FY19F EV/EBITDA of 12x, on par with its 3-year average of 12x.

With 3QFY18 results likely to be announced on 18 October, we have reduced FY19FFY20F earnings by 4% on expectations of a more significant impact from the loss of U Mobile roaming revenue, which has contributed quarterly revenues of RM75mil in the past. Our new FY19F-FY20F earnings are now 10%-14% below consensus.

QUICK TAKE

DRB-Hicom: Taking stock of the X70 Hold

RETAIL RESEARCH

Stocks On Radar: Handal Resources, Wah Seong, Bumi Armada, Heineken Malaysia

NEWS HIGHLIGHTS

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Source: AmInvest Research - 3 Oct 2018