Company Info
My Analysis
Research House
Accounting Ratio
My notes based on 2010 quarter 3 report (number in '000):-
- The Group recorded a quarter on quarter revenue growth of 1% or RM25 million primarily driven by an increase in non-voice revenue from wireless broadband, advance data services (ADS), and short message service (SMS) business, partially offset by reduction in interconnect revenue which was in tandem with the reduction in mobile and fixed termination rates during the current quarter. Wireless broadband revenue grew by 36% or RM28 million to RM106 million on increased subscriptions from 448,000 as at 30 June 2010 to 524,000 as at 30 September 2010
- Monthly postpaid and prepaid ARPU were impacted by the reduction in termination rates and lower domestic usage from higher take up of lower priced plans. Wireless broadband ARPU was relatively stable at RM70
- In the current quarter, the Group’s EBITDA margin recovered from 46.9% as preceding quarter was largely impacted by cost incurred for the 2010 FIFA World Cup sponsorship, to 51.4% with EBITDA improving significantly by RM110 million or 11% on the back of higher revenue and lower operating expenses. The lower operating expenses was primarily due to lower broadband modem and device expenses coupled with cost savings from cost management initiatives in the current quarter
- As a result of the higher EBITDA and lower finance costs partly offset by higher depreciation charge, PBT at RM815 million was RM95 million or 13% higher than the preceding quarter. Consequently, profit for the period was higher at RM601 million compared to RM532 million in the preceding quarter
- Revenue for the nine months ended 30 September 2010 increased by 2% or RM159 million over the corresponding period last year mainly due to increased non-voice revenue generated from the mobile services, partially offset by reduction in interconnect revenue. The growth in non-voice revenue was primarily due to increase in wireless broadband and ADS. Mobile subscriptions grew 15% with prepaid and wireless broadband growing by 1,489,000 and 335,000 subscriptions respectively
- The ARPU for prepaid, postpaid and wireless broadband were impacted by the higher take up of lower priced plans resulting in lower ARPU respectively. The monthly blended MOU per subscription remained relatively flat at 173 minutes with postpaid registering lower MOU by 13 minutes offset by higher prepaid MOU by 9 minutes
- The Group’s EBITDA grew by RM17 million on the back of higher revenue. EBITDA margin was lower by 1% at 49.5% largely impacted by higher sales and marketing costs incurred for the 2010 FIFA World Cup sponsorship and increase in device expenses, partly offset by lower allowance for doubtful debts from improved collection and cost savings from cost management initiatives
- As a result of higher finance costs and tax expense partly offset by higher EBITDA and lower depreciation charge, PBT at RM2,300 million was RM13 million or 1% lower than the corresponding period last year. Consequently, profit for the period was lower at RM1,685 million compared to RM1,730 million in the corresponding period last year
- Estimate next 4Q eps after 2010 Q3 result announced = 0.075*4*1.05 = 0.315, estimate PE on current price 5.38 = 16.06(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) | 40,350,000,000 (Very Large) |
| Par Value | RM 0.10 |
My Analysis
| Forecast P/E now | (5.38-0.32)/0.315 = 16.06 (High) |
| Target Price | 5.04+0.32 = 5.36 (PE 16.0, EPS 0.315, DPS 0.32) |
| Decision | NOT BUY unless price below 5.25 |
| Comment | Revenue second consecutive quarter increasing and also higher than preceding year corresponding quarter, eps increased but lower than preceding year corresponding quarter, free cash flow increasing but no positive net cash flow, weak liquidity ratio, high gearing ratio, high payables period |
| First Support Price | 5.25 |
| Second Support Price | 5.2 |
| Risk Rating | LOW |
Research House
| ECM Target Price | 5.9 (2010-12-01) |
| HwangDBS Target Price | 5.1 (2010-12-01) |
| MIDF Target Price | 5.5 (2010-12-01) |
| OSK Target Price | 5.4 (2011-01-18) |
Accounting Ratio
| Return on Equity | 25.04% |
| Dividend Yield | 5.58% |
| Profit Margin | 36.78% |
| Tax Rate | 26.26% |
| Asset Turnover | 0.4953 |
| Net Asset Value Per Share | 1.16 |
| Net Tangible Asset per share | -0.31 |
| Price/Net Tangible Asset Per Share | -17.06 |
| Cash Per Share | 0.13 |
| Liquidity Current Ratio | 0.6176 |
| Liquidity Quick Ratio | 0.5685 |
| Liquidity Cash Ratio | 0.3197 |
| Gearing Debt to Equity Ratio | 1.0405 |
| Gearing Debt to Asset Ratio | 0.5099 |
| Working capital per thousand Ringgit sale | -13.1% |
| Days to sell the inventory | 12 |
| Days to collect the receivables | 31 |
| Days to pay the payables | 221 |
My notes based on 2010 quarter 3 report (number in '000):-
- The Group recorded a quarter on quarter revenue growth of 1% or RM25 million primarily driven by an increase in non-voice revenue from wireless broadband, advance data services (ADS), and short message service (SMS) business, partially offset by reduction in interconnect revenue which was in tandem with the reduction in mobile and fixed termination rates during the current quarter. Wireless broadband revenue grew by 36% or RM28 million to RM106 million on increased subscriptions from 448,000 as at 30 June 2010 to 524,000 as at 30 September 2010
- Monthly postpaid and prepaid ARPU were impacted by the reduction in termination rates and lower domestic usage from higher take up of lower priced plans. Wireless broadband ARPU was relatively stable at RM70
- In the current quarter, the Group’s EBITDA margin recovered from 46.9% as preceding quarter was largely impacted by cost incurred for the 2010 FIFA World Cup sponsorship, to 51.4% with EBITDA improving significantly by RM110 million or 11% on the back of higher revenue and lower operating expenses. The lower operating expenses was primarily due to lower broadband modem and device expenses coupled with cost savings from cost management initiatives in the current quarter
- As a result of the higher EBITDA and lower finance costs partly offset by higher depreciation charge, PBT at RM815 million was RM95 million or 13% higher than the preceding quarter. Consequently, profit for the period was higher at RM601 million compared to RM532 million in the preceding quarter
- Revenue for the nine months ended 30 September 2010 increased by 2% or RM159 million over the corresponding period last year mainly due to increased non-voice revenue generated from the mobile services, partially offset by reduction in interconnect revenue. The growth in non-voice revenue was primarily due to increase in wireless broadband and ADS. Mobile subscriptions grew 15% with prepaid and wireless broadband growing by 1,489,000 and 335,000 subscriptions respectively
- The ARPU for prepaid, postpaid and wireless broadband were impacted by the higher take up of lower priced plans resulting in lower ARPU respectively. The monthly blended MOU per subscription remained relatively flat at 173 minutes with postpaid registering lower MOU by 13 minutes offset by higher prepaid MOU by 9 minutes
- The Group’s EBITDA grew by RM17 million on the back of higher revenue. EBITDA margin was lower by 1% at 49.5% largely impacted by higher sales and marketing costs incurred for the 2010 FIFA World Cup sponsorship and increase in device expenses, partly offset by lower allowance for doubtful debts from improved collection and cost savings from cost management initiatives
- As a result of higher finance costs and tax expense partly offset by higher EBITDA and lower depreciation charge, PBT at RM2,300 million was RM13 million or 1% lower than the corresponding period last year. Consequently, profit for the period was lower at RM1,685 million compared to RM1,730 million in the corresponding period last year
- Estimate next 4Q eps after 2010 Q3 result announced = 0.075*4*1.05 = 0.315, estimate PE on current price 5.38 = 16.06(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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