Wednesday, October 27, 2010

DiGi advances after RHB Research maintains Outperform call

KUALA LUMPUR: DIGI.COM BHD [] shares advanced on Wednesday, Oct 27 after RHB Research maintained its Outperform call on the stock with a DCF-derived fair value of RM26.35.

At 9.20am, DiGi was up 12 sen to RM24.78.

RHB Research said DiGi's net profit came in within its and consensus estimates at 77%-78% of full year estimates.

Revenue was up 1.2% on-quarter, and would have been higher at 3.5% if not for RM30m lost due to lower mobile termination rates. The lower mobile termination rates effective July 2010 caused postpaid and prepaid Average Revenue Per Minute (ARPM) to dip marginally on-quarter.

"Overall net additions' momentum slowed down in 3Q10, adding only 142k subscribers (2Q10: +158,000). Ebitda margins improved 0.6 basis points on-quarter to 43.9% as DiGi replaced upfront handset subsidies with monthly discounts on contracts," it said.

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