• HLIB Institutional Research has a BUY rating on AXIATA with target price of RM7.52, or 27.5% upside. AXIATA remains our top proxy pick for telco sector as it offers resilient growth prospects (FY14-17 PBT CAGR of 4.4%) at undemanding FY15-17 EV/EBITDA of 8.2-8.3x ( vs . DIGI’s 11.8-13.1x and MAXIS 12.1-12.7x), supported by decent yields of 4.1-4.6% for FY15-17. AXIATA’s 8 sen interim net dividend (payable on 29 Oct) would go-ex today. We believe such valuations would provide a sufficient margin of safety and cushion further sharp share price decline, supported by grossly oversold hourly indicators.
• Strong supports at RM5.59-5.71. From 2-month high of RM6.85 on 3 Aug, AXIATA’s s hare price tumbled 18.3% to a low of RM5.59 on 18 Aug. Subsequently, it was trapped in RM5.65-6.40 range bound consolidation before closing at RM5.90 on 25 Sep.
• Ahead of the potential 3Q15 window dressing activities, AXIATA’s s hare prices may stage a rebound following a long white candlestick formation on 25 Sep. A decisive breakout above RM6.00 psychological barrier will lift prices higher to retest RM6.10 (50-d SMA) and RM6.34 (17 Sep high) levels before our long term objective of RM6.58 (200-d SMA). Key supports are situated at RM5.71 (25 Sep low) and RM5.59. Cut loss at RM5.55.

Source: Hong Leong Investment Bank Research - 28 Sep 2015