KUALA LUMPUR: OSK Research has upgraded DIGI.COM BHD [] to a Buy with a target price of RM27.90 from RM24.40 based on a discounted cashflow and 5.5 times FY11 enterprise value/earnings before interest, tax, depreciation and amortisation (EV/EBITDA).
The research house said on Monday, Jan 31 there were no surprises in DiGi's 4Q/FY10 results. Although the speculated special dividend did not materialize, DiGi dropped the biggest hint yet that a windfall payout may come in FY11.
'We estimate additional cash of up to RM1.20/share would likely be returned from a more optimal capital structure achieved in 2011. We see greater upside to Digi's EBITDA from the sharing of infrastructure with Celcom starting FY12 and tweak our core earnings forecasts for FY11/12 higher by 10-23% after building in additional opex savings.
'Accordingly, our TP is raised to RM27.90 from RM24.40 based on DCF (WACC: 9.5%) and 5.5x FY11 EV/EBITDA. Upgrade to BUY given the >10% upside. Digi is our best pick for exposure to Malaysia telecoms after Axiata,' it said.
The research house said on Monday, Jan 31 there were no surprises in DiGi's 4Q/FY10 results. Although the speculated special dividend did not materialize, DiGi dropped the biggest hint yet that a windfall payout may come in FY11.
'We estimate additional cash of up to RM1.20/share would likely be returned from a more optimal capital structure achieved in 2011. We see greater upside to Digi's EBITDA from the sharing of infrastructure with Celcom starting FY12 and tweak our core earnings forecasts for FY11/12 higher by 10-23% after building in additional opex savings.
'Accordingly, our TP is raised to RM27.90 from RM24.40 based on DCF (WACC: 9.5%) and 5.5x FY11 EV/EBITDA. Upgrade to BUY given the >10% upside. Digi is our best pick for exposure to Malaysia telecoms after Axiata,' it said.
No comments:
Post a Comment