(HOLD/Target: RM5.35)

Management sees ample opportunities in the presence of data proliferation, hence capex spending will remain a priority. That said, near-term outlook remains challenging amid weak consumer sentiment and intensifying price competition. Our earnings sensitivity analysis suggests that a 5% ARPU contraction and elevated marketing expenses will lead to a 6% drop in our 2016 earnings forecast. Maintain HOLD. Target price: RM5.35. Entry price: RM4.50.

Source: UOB Kay Hian Research - 15 Mar 2016