Period 4Q14/FY14
Actual vs. Expectations FY14 core PATAMI of RM1.9b (-9% YoY) came in within expectation and accounted for 104% of ours as well as 100% of the street full year estimate.
Dividends A total 16.0 sen DPS (which included a fourth interim dividend of 8.0 sen and a final dividend of 8.0 sen) was declared as expected. The fourth interim dividend exdate has been set for 25-Feb while the final dividend exdate will be determined post the company’s AGM.
Key Results Highlights YoY, FY14 revenue declined by 8% to RM8.4b as a result of lower services revenue (-3% to RM8.3b) and non-services revenue (i.e. device and hubbing business, -72% to RM160m). The lower services revenue was primarily due to lower voice (-4%) and SMS (-32% to RM783m) earnings contributions. Mobile internet revenue, however, improved by 16% to RM2.3b partially mitigating the lower voice & SMS usage. Normalised EBITDA, meanwhile, declined by 7% to RM4.2b while margin improved to 50.1% (vs. 49.8% a year ago) as a result of lower traffic, device-related expenses, and staff costs.
QoQ, 4Q14 turnover climbed 3% to RM2.1b, thanks to the higher service revenue (2%) that was mainly driven by higher voice and data segment. The former was mainly fuelled by higher customer traction gained in its Hotlink and MaxisONE Plan while the latter was driven by its ‘worry free’ plans. On a normalised basis, EBITDA dropped by 7% to RM1.0b with a margin of 47.1% (vs. 51.8% in 3Q14) as a result of the higher operating cost and the reversal of staff cost (RM44m) in 3Q14. Maxis recorded a total of 498k subscribers’ net adds in 4Q14, bringing its total subscriber base to 12.9m. The higher subscriber adds was mainly led by the prepaid segment (543k, as a result of higher traction gained by #Hotlink) while the postpaid segment continued to suffer with a 45k loss in subscribers due to the re-pricing impact. ARPU-wise, the prepaid stayed at RM35 while postpaid improved RM3 to RM97 due to seasonality factor. Having said that, its MaxisONE Plan continued to gain traction with subscriber base now at more than 250k and generating ARPU of c.RM150. Its blended smartphone penetration rate improved to 57% (+3ppt QoQ; mainly boosted by strong prepaid uptake) with 67% recorded in the postpaid segment and 54% in the prepaid.
Outlook Expecting low single digit service revenue growth in FY15 and an absolute EBITDA similar to FY14 level. Its capex, meanwhile, is expected to stay at RM1.1b with dividend policy unchanged (target payout ratio of not less than 75% of consolidated PAT).
Change to Forecasts Reduced FY15 core NP to RM1.96b (-4.4%) after taking management’s latest guidance into the consideration. Meanwhile, we introduce our FY16E numbers; we expect Maxis core NP to hit RM2.1b (9% YoY) on the back of higher revenue growth and operational efficiency.
Rating Maintain MARKET PERFORM Valuation Maintained TP at RM7.16 based on a higher targeted FY15E EV/fwd EBITDA of 14.0x (vs. 13.7x previously), representing a 1.0x std deviation above the 4-year mean.
Risks to Our Call Higher-than-expected margin pressure and subscribers churn.
Source: Kenanga
Chart | Stock Name | Last | Change | Volume |
---|