Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: MIDF



MIDF Research has raised its 2010 and 2011 revenue forecast for DiGi.Com Bhd by 2.4 per cent and 3.3 per cent respectively, to reflect the growth in data revenue.

The research house said data revenue had the potential to grow further and the expected collaboration with Celcom, will bring substantial cost saving benefits to DiGi.

It also believes, the mobile internet market in Malaysia is set to grow significantly, based on the rising popularity of smart phones with an explosion of Android and Symbian based models to rival the iPhone 4.

"With the entry point projects (EPP) announced, stressing on increasing connectivity, we expect that data will increasingly be the new driver for growth.

"We like the fact that Digi has moved from handset subsidies to monthly discount on contracts to attract users and we believe this is a key reason for the good performance in 3Q10.

DiGi, yesterday announced an interim dividend of 50 sen, which brings the total dividend announced in FY10 to RM1.20.

"We believe that its consistently above-market dividend yield will enhance the attractiveness of the stock. We expect dividend yield to reach 6.1 per cent, based on current price in FY10," MIDF added.

It has also upgraded DiGi to a "buy" with a higher target price of RM27.00 from RM24.00 previously. -- Bernama