Although Axiata's revenue is within forecast, FY11 core net profit of RM2,383.2m came in below expectations, accounting for 94% of our full-year forecast and 91% of consensus.

Proposed 15 sen final dividend making total for the year of 19sen representing 60% payout ratio higher than our expectation of 35%. Management guided a 65% payout ratio in 2013.

Celcom revenue grew 10% yoy driven by 10% increase in broadband subscribers and 7% increase in revenue generating base customers. Successful voice initiatives have resulted in increase in blended ARPU (+2% qoq) on the back of blended MOU (+8.6% qoq).

XL FY11revenue grew 7% yoy on the back of 14.9% growth in subscriber base. But profitability was affected by investment in data and outsourcing (severance pay).

We reiterate our HOLD call despite higher revised SOP target price of RM5.02 from RM4.92 due to higher valuation of Celcom who enjoys broadband tax incentive and bullish data growth.

Source: HLB Research 24 Feb 2012