Company Info
My Analysis
Research House
Accounting Ratio
My notes based on 2010 quarter 4 report (number in '000):-
- The Group recorded a quarter-on-quarter revenue growth of 4% or RM94 million primarily driven by an increase in non-voice revenue by RM84 million or 10% to RM893 million contributed by advanced data services (ADS), short message service (SMS) and wireless broadband businesses, partially offset by reduction in interconnect revenue. Non-voice revenue as a percentage of total mobile services revenue increased from 39% to 41%. Higher ADS revenue was mainly driven by mobile internet browsing, content and device revenues. Wireless broadband revenue grew by 5% or RM5 million to RM111 million on increased subscriptions from 524,000 as at 30 September 2010 to 594,000 as at 31 December 2010 and collection of activation fees
- Monthly postpaid ARPU increased by RM7 to RM108 mainly due to higher mobile internet usage, domestic voice usage and international direct dialing voice. Monthly prepaid ARPU remained relatively stable at RM34 whilst wireless broadband ARPU dropped RM6 to RM64 as a result of higher take up of lower monthly subscription packages. The monthly blended MOU per subscription remained relatively stable at 171 minutes with postpaid registering marginally higher MOU by 4 minutes
- In the current quarter, the Group’s EBITDA improved by RM30 million or 3% on the back of higher revenue and one-off other income of RM23 million arising from liquidated damages claim against an external vendor, partly offset by higher device expenses and operating expenses. The resultant EBITDA margin decreased by 0.8% point from the previous quarter
- As a result of higher EBITDA partly offset by higher depreciation charge and finance costs, PBT at RM832 million was RM17 million or 2% higher than the preceding quarter. Consequently, profit for the period was higher at RM610 million compared to RM601 million in the preceding quarter
- Revenue for Year 2010 increased by 3% or RM258 million over last year mainly due to increased non-voice revenue generated from the mobile services, partially offset by reduction in voice and interconnect revenue. The growth in non-voice revenue was primarily due to increase in ADS and wireless broadband. Mobile subscriptions at 13,954,000, grew 14% with prepaid and wireless broadband growing by 1,371,000 and 330,000 subscriptions respectively
- The ARPUs for prepaid and wireless broadband were impacted by the higher take up of lower priced plans resulting in lower ARPU respectively whilst the ARPU for postpaid remained flat at RM104. The monthly blended MOU per subscription declined marginally by 3 minutes with postpaid registering lower MOU by 15 minutes offset by higher prepaid MOU by 7 minutes
- The Group’s EBITDA grew by 2% or RM79 million on the back of higher revenue and one-off other income partly offset by higher device expenses and operating expenses. The resultant EBITDA margin decreased by 0.6% point from the previous year largely impacted by increase in device expenses, network costs and higher sales and marketing costs incurred for the 2010 FIFA World Cup sponsorship, partly offset by lower allowance for doubtful debts from improved collection, repair and maintenance costs coupled with cost savings from cost management initiatives
- As a result of higher EBITDA, lower depreciation charge and one-off items in relation to Initial Public Offering (IPO) of RM103 million incurred in 2009 partly offset by higher finance costs and tax expense, PBT at RM3,132 million was RM125 million or 4% higher than last year. Consequently, profit for the year was higher at RM2,295 million compared to RM2,232 million in Year 2009
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0813*4*1.05 = 0.3415, estimate PE on current price 5.47 = 15.08(DPS 0.32)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.075*4*1.05 = 0.315, estimate highest/lowest PE = 16.41/15.65 (DPS 0.32)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0736*4*1.05 = 0.3091, estimate highest/lowest PE = 16.66/15.92 (DPS 0.32)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.328*0.9 = 0.2952, estimate highest/lowest PE = 17.68/16.46 (DPS 0.32)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.082*4 = 0.328, estimate highest/lowest PE = 16.07/14.82 (DPS 0.24)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.082*4 = 0.328, estimate highest/lowest PE = 16.1/15.52 (DPS 0.24)
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| Market Capital (Capital Size) | 41,025,000,000 (Very Large) |
| Par Value | RM 0.10 |
My Analysis
| Forecast P/E now | (5.47-0.32)/0.3415 = 15.08 (Moderate) |
| Target Price | 5.46+0.32 = 5.78 (PE 16.0, EPS 0.3415, DPS 0.32) |
| Decision | BUY |
| Comment | Revenue increased 4.2% and is third consecutive quarter increasing and also higher than preceding year corresponding quarter 4.5%, eps increased 1.5% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 21.2%, cash generated from operating not enough to cover financing activities hence still increase borrowing, weak liquidity ratio, high gearing ratio, high payables period |
| First Support Price | 5.35 |
| Second Support Price | 5.2 |
| Risk Rating | LOW |
Research House
| MIDF Target Price | 5.5 (2010-12-01) |
| CIMB Target Price | 5.6 (2011-02-08) |
| AMMB Target Price | 5.49 (2011-03-01) |
| ECM Target Price | 5.7 (2011-03-01) |
| HLG Target Price | 5.51 (2011-03-01) |
| HwangDBS Target Price | 5.1 (2011-03-01) |
| JF APEX Target Price | 6.15 (2011-03-01) |
| Maybank Target Price | 5.5 (2011-03-01) |
| RHB Target Price | 5.65 (2011-03-01) |
| TA Target Price | 6.1 (2011-03-01) |
| OSK Target Price | 5.2 (2011-03-07) |
Accounting Ratio
| Return on Equity | 26.48% |
| Dividend Yield | 5.85% |
| Profit Margin | 36.02% |
| Tax Rate | 26.68% |
| Asset Turnover | 0.4866 |
| Net Asset Value Per Share | 1.16 |
| Net Tangible Asset per share | -0.31 |
| Price/Net Tangible Asset Per Share | -17.52 |
| Cash Per Share | 0.12 |
| Liquidity Current Ratio | 0.6329 |
| Liquidity Quick Ratio | 0.5685 |
| Liquidity Cash Ratio | 0.2702 |
| Gearing Debt to Equity Ratio | 1.103 |
| Gearing Debt to Asset Ratio | 0.5245 |
| Working capital per thousand Ringgit sale | -13.8% |
| Days to sell the inventory | 17 |
| Days to collect the receivables | 39 |
| Days to pay the payables | 254 |
My notes based on 2010 quarter 4 report (number in '000):-
- The Group recorded a quarter-on-quarter revenue growth of 4% or RM94 million primarily driven by an increase in non-voice revenue by RM84 million or 10% to RM893 million contributed by advanced data services (ADS), short message service (SMS) and wireless broadband businesses, partially offset by reduction in interconnect revenue. Non-voice revenue as a percentage of total mobile services revenue increased from 39% to 41%. Higher ADS revenue was mainly driven by mobile internet browsing, content and device revenues. Wireless broadband revenue grew by 5% or RM5 million to RM111 million on increased subscriptions from 524,000 as at 30 September 2010 to 594,000 as at 31 December 2010 and collection of activation fees
- Monthly postpaid ARPU increased by RM7 to RM108 mainly due to higher mobile internet usage, domestic voice usage and international direct dialing voice. Monthly prepaid ARPU remained relatively stable at RM34 whilst wireless broadband ARPU dropped RM6 to RM64 as a result of higher take up of lower monthly subscription packages. The monthly blended MOU per subscription remained relatively stable at 171 minutes with postpaid registering marginally higher MOU by 4 minutes
- In the current quarter, the Group’s EBITDA improved by RM30 million or 3% on the back of higher revenue and one-off other income of RM23 million arising from liquidated damages claim against an external vendor, partly offset by higher device expenses and operating expenses. The resultant EBITDA margin decreased by 0.8% point from the previous quarter
- As a result of higher EBITDA partly offset by higher depreciation charge and finance costs, PBT at RM832 million was RM17 million or 2% higher than the preceding quarter. Consequently, profit for the period was higher at RM610 million compared to RM601 million in the preceding quarter
- Revenue for Year 2010 increased by 3% or RM258 million over last year mainly due to increased non-voice revenue generated from the mobile services, partially offset by reduction in voice and interconnect revenue. The growth in non-voice revenue was primarily due to increase in ADS and wireless broadband. Mobile subscriptions at 13,954,000, grew 14% with prepaid and wireless broadband growing by 1,371,000 and 330,000 subscriptions respectively
- The ARPUs for prepaid and wireless broadband were impacted by the higher take up of lower priced plans resulting in lower ARPU respectively whilst the ARPU for postpaid remained flat at RM104. The monthly blended MOU per subscription declined marginally by 3 minutes with postpaid registering lower MOU by 15 minutes offset by higher prepaid MOU by 7 minutes
- The Group’s EBITDA grew by 2% or RM79 million on the back of higher revenue and one-off other income partly offset by higher device expenses and operating expenses. The resultant EBITDA margin decreased by 0.6% point from the previous year largely impacted by increase in device expenses, network costs and higher sales and marketing costs incurred for the 2010 FIFA World Cup sponsorship, partly offset by lower allowance for doubtful debts from improved collection, repair and maintenance costs coupled with cost savings from cost management initiatives
- As a result of higher EBITDA, lower depreciation charge and one-off items in relation to Initial Public Offering (IPO) of RM103 million incurred in 2009 partly offset by higher finance costs and tax expense, PBT at RM3,132 million was RM125 million or 4% higher than last year. Consequently, profit for the year was higher at RM2,295 million compared to RM2,232 million in Year 2009
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0813*4*1.05 = 0.3415, estimate PE on current price 5.47 = 15.08(DPS 0.32)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.075*4*1.05 = 0.315, estimate highest/lowest PE = 16.41/15.65 (DPS 0.32)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0736*4*1.05 = 0.3091, estimate highest/lowest PE = 16.66/15.92 (DPS 0.32)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.328*0.9 = 0.2952, estimate highest/lowest PE = 17.68/16.46 (DPS 0.32)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.082*4 = 0.328, estimate highest/lowest PE = 16.07/14.82 (DPS 0.24)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.082*4 = 0.328, estimate highest/lowest PE = 16.1/15.52 (DPS 0.24)
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