(AXIATA MK/HOLD/RM4.85/Target: RM4.90)

1H17 core net profit dropped 23% yoy to RM644m given Celcom’s underperformance (albeit sequential EBITDA improvement) and losses at Robi-Airtel and Idea. The earnings are in-line with our expectation but we downgrade 2018-19 earnings forecasts by 35% to reflect potentially widened losses at Idea. Separately, we view the acquisition of 13,700 towers in Pakistan positively, as it could lift future earnings by 3%. Maintain HOLD with a lower target price of RM4.90. Entry price: RM4.10.

Source: UOB Kay Hian Research - 5 Sept 2017