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November 04, 2009 20:52 PM
MAXIS Picks Right Time For IPO
KUALA LUMPUR, Nov 4 (Bernama) -- The timing of Maxis Bhd's initial public offering (IPO) is right, MIMB Investment Bank said in a research note Wednesday.
"The IPO coincides with the improved economic situation, more positive market sentiment, stronger consumer confident and recovery on the worldwide telcommunications (telco) industry," it said.
MIMB said overall, Maxis' net worth was expected to be around RM46.5 billion, giving a fair value of RM6.20 per share, based on 15.8 price earning ratio (PER).
It said the average PER of its two major rivals, DiGi and Axiata, based on forward 2010 earning per share, represented an attractive 19 per cent upside potential from the IPO price of RM5.20.
The bank said Maxis' net profit improved by 21 per cent year-on-year (YoY) in 2008 and was expected to grow by 16.4 per cent YoY in 2009.
"Maxis also achieved the highest EBITDA (earnings before interest, tax, depreciation and amortisation) margin among its peers with 54.2 per cent in financial year (FY) 2008 and 50.6 per cent in FY 2009," it said.
MIMB said institutional investors should take the opportunity to get a direct exposure to a highly-liquid mobile telco player.
"We do believe that the removal of overseas operation from the IPO profile will make Maxis as a pure defensive dividend play instead of the long-term growth play for the aggressive investors," it said.
The bank said the biggest risk for IPO investors would be when the sub-prime crisis unravelled its next wave.
"Maxis' mobile market could be impacted by the prolonged sub-prime crisis as worldwide telco industry could decelerate and subscription growth may slow down further due to lower consumer spending and fewer business start-ups.
"This, however, should be partially offset by an expected increase in international calls given the cutbacks in business travel," it said.
-- BERNAMA
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