Marginally within expectations. On the surface, 2Q12 was within expectations but there is no doubt competition is rising. EBITDA margin would have fallen QoQ if not for a well-timed reversal on accruals, and handset subsidies may rise, which would hurt industry margins. But low interest rates look set to persist and DiGi does not face such bad prospects that it warrants a continued sell call. Further, capital management initiatives should restart once accelerated depreciation ends in 2013. Upgrade to HOLD, with a EV-derived TP of MYR4.22.

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Source: Maybank Research - 24 July 2012