Maxis’ new CEO, Johan will only join in July and thus we believe little will be discussed on the company’s strategic direction and guidance during the 1Q conference call on 9 May. We think traction in its fibre subscriber growth should return  while the WBB market is a niche market it might relook into. Its 1Q results may be muted affair if device expenses continue to suppress EBITDA margin. Maintain Neutral.  

♦  Different revenue growth expectations? It remains to be seen if incoming CEO Johan Dennelind will offer similar guidance on Maxis’ revenue growth for 2013. Ex-CEO Sandip Das had sounded more upbeat on prospects for 2013 with a mid-single digit revenue growth target (FY12: +1.9%). Achieving this target would require minimal contraction in voice revenue and strong growth in non-voice, we believe. In any case, the full-year maiden contributions from U Mobile’s sharing fees will help underpin Maxis’ revenue growth in 2013.  

♦  Maxis-Astro partnership. The Maxis’ home service in partnership with Astro IPTV service was finally launched on 30 April. With the launch of the Maxis-Astro combined service, we believe Maxis’ home fibre subscriber growth should regain traction in 2H.

♦  Revival of wireless broadband in the horizon? While the focus for Maxis will be its home services, we believe Maxis may relook and attempt to revive its wireless broadband (WBB) business going forward, now that Maxis is able to offer LTE services by utilising the 1800Mhz spectrum. We believe there is a market albeit niche to be addressed for those seeking high-speed Internet mobility, in particular the mid-screen (tablet) users.

♦  1QFY13 results preview.  Maxis will announce its 1QFY13 results on 9 May. We think its 1QFY13 results could be a fairly muted affair if device expenses continue to suppress EBITDA margin. All in, we estimate 1Q net profit could be flattish q-o-q. Besides that, we expect Maxis to declare its first interim single-tier DPS of 8 sen.

Source: RHB