KUALA LUMPUR: Hwang DBS Vickers Research is maintaining a Hold recommendation'' on Maxis Bhd with a discounted cashflow-based target price of unchanged at RM5.10.
It said on Tuesday, March 1 it reduced its EBITDA forecasts in FY11F-12F and cut its capex assumptions based on latest guidance.
'Note that we have also lowered our dividend payout assumptions in FY11F-12F to 100% (from 117%) considering its limited retained earnings as at end-FY10. However, net yield is still at attractive 6%,' it said.
HDBSVR said Maxis EBITDA rose 3% on-quarter on the back of 4% rise in revenue. This was mainly supported by 10% jump in non-voice revenue (39% of group revenue).
'We understand that the non-voice segment grew given higher small screen data usage and larger wireless broadband subscriber base. Wireless broadband revenue grew 5% on-quarter as Maxis gained 70,000 net adds (to 594,000 subscribers) although ARPU dipped 9% to RM64,' it said.
The research house Maxis' mobile voice revenue was flat on-quarter helped by higher postpaid ARPU of RM108, 4% rise in prepaid subscriber base (to 10.7 million) as well as stable MOUs in both segments.
Maxis' EBITDA margin was flat on-quarter at 51%. Maxis also announced total net DPS of 16 sen for the quarter which translates into 3% yield, above its expectation.
'Reduced FY11F-12F earnings by 3-6% mainly after raising our cost assumptions and lowering our non-mobile revenue growth forecasts (given the lower-than-expected performance in FY10).
'We expect Maxis to incur additional costs (including customer acquisition costs) for its new fixed Home services (partly via TM's HSBB network), which is expected to be launched at end-March 2011. Given that the services are new and therefore lacks scale, it could drag down margins but the impact should be minimal over the next two to three years,' it said.
It said on Tuesday, March 1 it reduced its EBITDA forecasts in FY11F-12F and cut its capex assumptions based on latest guidance.
'Note that we have also lowered our dividend payout assumptions in FY11F-12F to 100% (from 117%) considering its limited retained earnings as at end-FY10. However, net yield is still at attractive 6%,' it said.
HDBSVR said Maxis EBITDA rose 3% on-quarter on the back of 4% rise in revenue. This was mainly supported by 10% jump in non-voice revenue (39% of group revenue).
'We understand that the non-voice segment grew given higher small screen data usage and larger wireless broadband subscriber base. Wireless broadband revenue grew 5% on-quarter as Maxis gained 70,000 net adds (to 594,000 subscribers) although ARPU dipped 9% to RM64,' it said.
The research house Maxis' mobile voice revenue was flat on-quarter helped by higher postpaid ARPU of RM108, 4% rise in prepaid subscriber base (to 10.7 million) as well as stable MOUs in both segments.
Maxis' EBITDA margin was flat on-quarter at 51%. Maxis also announced total net DPS of 16 sen for the quarter which translates into 3% yield, above its expectation.
'Reduced FY11F-12F earnings by 3-6% mainly after raising our cost assumptions and lowering our non-mobile revenue growth forecasts (given the lower-than-expected performance in FY10).
'We expect Maxis to incur additional costs (including customer acquisition costs) for its new fixed Home services (partly via TM's HSBB network), which is expected to be launched at end-March 2011. Given that the services are new and therefore lacks scale, it could drag down margins but the impact should be minimal over the next two to three years,' it said.
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