I view it this way, if good news market still cannot erect, meaning impotent already. If bad news also can erect, meaning already took <removed>, safe to play

Higher Maxis dividends expectedBy RISEN JAYASEELAN


DiGi puts pressure after record high dividend payout


risen@thestar.com.my

PETALING JAYA: With DiGi.Com having raised its dividend payout to record levels, the pressure is on Maxis Bhd to declare a similarly attractive payout, analysts said.

Maxis, which declared a 6 sen dividend when it announced its FY2009 third quarter results last November, will report its fourth quarter results on Feb 19.

Analysts consensus estimates are that Maxis will pay a final dividend of 10 sen a share then.

To recap, DiGi has declared a total dividend payout of RM1.78 for last year, giving the stock a dividend yield of 8%, based on its current price of RM22.32 a share.

That payout equalled 138% of DiGi’s 2009 net profits, way above its guidance of paying out 80% of profits.

Maxis on the other hand, has a declared dividend payout ratio of 75% of its net profits but is expected to pay out more than that.

In the past years prior to its being de-listed, Maxis has paid out more than 100% of its net profits.

“We believe Maxis will pay out dividends each quarter, with a larger amount to be paid in the fourth quarter of every year. A special dividend at the end of every year is also possible, in our view,” stated a report by JP Morgan dated Jan 5.

Indeed, analysts are expecting Maxis’ dividend yield to be in the 8% region for FY2010.

Based on its current share price of RM5.33 per share, Maxis would have to declare total dividends of 43 sen a share in FY2010 in order for its shares to enjoy a yield of 8%.

This is in line with JP Morgan’s estimate, that figure that Maxis would pay out 127% of its 2010 net earnings.

Analysts consensus estimate of Maxis’ FY2010 net earnings is RM2.5bil. 127% of that works out to RM3.17bil, which in turn translates into about 42 sen per Maxis share based on its issued share base of 7.5 billion shares.

The question is, can Maxis afford to do that?

Maxis declined to comment for this article, considering it is a closed period, pending their results announcement.

Dividends are typically paid from free cash flows, which are essentially the companies EBITDA (earnings before interest, tax, depreciation and amortisation) minus capital expenditures.

In a previous interview with the media, Maxis’ chief financial officer Rossana Rashidi has said that the company’s capital expenditure is expected to taper off post-2010 because by then, lumpy expenditures such as rolling out its mobile broadband footprint, in terms of coverage and capacity, would have been done.

Rossana has also said that Maxis’ net debt to ebitda level post-listing of 1.1 times gave the company an opportunity for “active capital management”. Maxis has said that it has the option to raise its net debt to EBITDA to between 1.7 to 2 times.

JP Morgan estimates Maxis’ free cash flows to be in the region of RM3.5bil for 2010 and RM3.8bil in 2011, giving Maxis sufficient headroom to declare attractive dividends.

This should put it in a good position to compete with DiGi’s attractive yields.

“Don’t forget that it was Maxis’ re-listing and its ensuing dividend promises that first upped the ante and subsequently got DiGi to raise its payouts,” noted an analyst.

Interestingly, the major shareholders of both companies are in need of cash due to their heavy investments in markets such as India.

This post has been edited by sharesa: Feb 9 2010, 03:12 PM

now i regret buying only 5 lots of supermx at 4.72 this morning

if i were you, i will sell it now and take profit.

5 lots also got > 400 profits now....

i thought of keeping it for now...wait for the yearly report to come out soon! so now my average for supermx is below RM5 ma

yeah-lor....with this kind of unstable market, ada untung just jual....
aya.....don't psycho him.....

Can someone pls bite off the 2700 lots of CSCSTEL at 1.60 please.

gua tarak physo him la, hehe, same mind as you lor sharesa, current market is best to play day trade. buy low sell high.

I agreed with you 2. If I have bought, I would have take profit liao...

Anyone knows the T-O column right of close price for Jupiter platform? What does it denote?

pana, ure words has a strong sentiment in it leh u ask us SELL NOW, i think everybody will start dumping

If Im not mistaken, it's Theoretical Opening price

grrrrr. wait for me T_T

SUPERMX RUN!

Yes...things are very volatile out there and I worry they will get worse because of the CNY holidays and also the HUGE pile of **** the Europeans are hiding under the rug.....

Top gainer is haiO at 291 lots. Can tahan ar?

everybody scaring me now but ill hold for the moment...still profitting for that 5lots hehe

Set a trailing stop to protect the profit lo.

yeap, now thinking of disposing. if 4.90 breaks, i will sell at any price

4.90 is the next tick nia le.