maybank2u has what

Maxis Berhad
Target Price : RM5.80 (Subscribe)

We take comparison with leading telecommunication service providers in the country and region to value Maxis. Our universe of comparison, comprise of regional telecommunication players. Some of the notable peers take we believe serve as a benchmark are Digi, SingTel, Tata Communication, Telstra, PCCW and China Communication Services. Taking a PER of 17x against its estimated FY10 numbers Maxis should be valued at RM5.80. With potential total upside of more than 15%, we would recommend a SUBSCRIBE on the IPO. Taking the 75% dividend payout policy as announced, we estimate FY10 dividend would be 25.6sen per share. Our valuation implies a dividend yield of 4.4%. As a comparison, dividend yield of regional stock ranges from 4.7% to 5.9%. Our valuation also implies an FY10 EV/EBITDA level of 9.3x. Average EV/EBITDA for regional companies is 7.43x. (Note: SingTel is valued at 11.16x, TATA Communication at 10.67x)


TA Research