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Thursday, September 15, 2011

KLCI Stock - AXIATA / 6888 - 2011 Quarter 2

Company Info
Market Capital (Capital Size)40,542,485,098 (Very Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(4.79-0.14)/0.2995 = 15.53 (Moderate)
Target Price4.79+0.14 = 4.93 (PE 16.0, EPS 0.2995, DPS 0.14)
DecisionNot interested unless queue to sell volume above 4.8 is low
Revenue increased 2.8% and also higher than preceding year corresponding quarter 5.1%, eps increased 21.1% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 14.7%, cash generated from operating enough to cover financing expenses and also got borrowing to cover investing expenses, weaker liquidity ratio at low level now, higher gearing ratio at above moderate level now, high payables ratio, all country profit maintain high
First Support Price4.8
Second Support Price4.6

Research House
HwangDBS Target Price5.6 (2011-03-23)
Credit Suisse Target Price6.1 (2011-03-30)
MIDF Target Price5.7 (2011-06-01)
HLG Target Price5.6 (2011-06-07)
AMMB Target Price6.24 (2011-07-05)
OSK Target Price5.77 (2011-08-18)
CIMB Target Price5.8 (2011-08-24)
ECM Target Price5.87 (2011-08-24)
JF Apex Target Price5.29 (2011-08-24)
Kenanga Target Price5.45 (2011-08-24)
Maybank Target Price5.5 (2011-08-24)
TA Target Price5.95 (2011-08-24)
UOB Target Price5.5 (2011-08-24)
RHB Target Price5.35 (2011-09-13)

Accounting Ratio
Return on Equity7.11%
Dividend Yield2.92%
Profit Margin24.96%
Tax Rate24.31%
Asset Turnover0.4086
Net Asset Value Per Share2.25
Net Tangible Asset per share1.35
Price/Net Tangible Asset Per Share3.69
Cash Per Share0.76
Liquidity Current Ratio1.2802
Liquidity Quick Ratio1.253
Liquidity Cash Ratio0.9395
Gearing Debt to Equity Ratio0.9578
Gearing Debt to Asset Ratio0.4682
Working capital per thousand Ringgit sale12.0%
Days to sell the inventory10
Days to collect the receivables41
Days to pay the payables273

My notes based on 2011 quarter 1 report (number in '000):-
- Higher revenue contribution from key Operating Companies ('OpCo')

- Robi Axiata Limited (“Robi”) revenue grew 21.9% mainly from higher prepaid and interconnect revenue which increased by 20.0% and 44.0% respectively

- Dialog Axiata Group (“Dialog”) revenue grew 8.8% mainly from higher interconnect and tower infrastructure revenue, which increased more than 100.0% and 47.4% respectively

- Revenue of XL grew 7.0% in tandem with the increase in subscriber base of 13.6% compared to Q2’10, whilst Celcom revenue grew 3.4% driven by 27.3% increase in broadband subscribers and 10.0% increase in revenue generating base customers

- The strengthening of Ringgit (RM) against local currencies of OpCo had unfavourably affected the overall Group’s translated revenue. At constant currency using Q2’10 exchange rate, the Group revenue would have registered a higher growth of 7.1%, quarter-on-quarter

- Higher profit mainly driven by higher PAT contribution from XL, positive contribution from Idea and Multinet in Q2’11, lower depreciation, amortisation and FRS impairment charge

- Estimate next 4Q eps after 2011 Q2 result announced = (0.0781+0.0645)*2*1.05 = 0.2995, estimate PE on current price 4.79 = 15.53(DPS 0.14)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.3024, estimate highest/lowest PE = 16.93/14.62 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.072*4*1.05 = 0.3024, estimate highest/lowest PE = 16.47/15.08 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0752*4*1.05 = 0.3158, estimate highest/lowest PE = 16.12/13.93
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0681*4*1.05 = 0.286, estimate highest/lowest PE = 16.29/15.24
- Estimate next 4Q eps after 2010 Q1 result announced = 0.265(no adjustment due to higher profit is from non-repeatable income), estimate highest/lowest PE = 16.98/13.89
- Estimate next 4Q eps after 2009 Q4 result announced = 0.631(average recent 3 quarter)*4 = 0.2524+(0.05*0.2524) = 0.265(5% grow from 0.2524), estimate highest/lowest PE = 15.28/13.21
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0595*4 = 0.238, estimate highest/lowest PE = 14.71/12.61
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0579*4 = 0.2316, estimate highest/lowest PE = 14.12/12.52

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