Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Research House: ECMLIBRA



Axiata Group Bhd, the country'ssecond-largest mobile-phone operator is well on track to exceed its 2010 key performance index (KPI), amid steady growth in its units.

In a research note today, ECM Libra said the company's KPI for 2010 was 12.1per cent revenue growth, earnings before interest, taxes, depreciation and amortisation (EBITDA) of 14.1 per cent and return on invested capital (ROIC) of10.1 per cent.

"We continue to like Axiata for steady growth in its domestic unit Celcom,and high teens growth for XL in Indonesia going forward," said ECM Libra.

Its other units, Dialog based in Sri Lanka and Robi in Bangladesh have shownpositive results in maintaining their turnaround, it added.

Axiata, yesterday, announced its second quarter financial result that beat market expectations amid an outstanding performance by its subsidiaries, with the domestic unit Celcom Axiata being the major contributor.

Its pre-tax profit rose to RM970.97 million for the second quarter endedJune 30, 2010, compared with RM878.62 million for the same quarter in 2009.

Axiata attributed the higher quarterly revenue to contributions from PT XLAxiata, Celcom and Axiata (Bangladesh) Ltd. Revenue increased to RM3.854 billion from RM3.214 billion previously.

Going forward, ECM Libra has revised its earnings estimation by 7-8 per centfor financial year 2010-2012 and the pending agreement to be sealed by Celcomwith DiGi on potential collaboration, bodes well for an upside margin for Celcom.

Hence, ECM Libra is maintaining a buy call for its share and has increased its target price to RM4.95 from RM4.77 previously. OSK Research also raised its target price for Axiata's shares to RM5.50 fromRM4.80 and marks the group as among its top regional telecommunication pick. -- Bernama