KLCI Stock - AXIATA / 6888 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	40,542,485,098 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(4.79-0.14)/0.2995 = 15.53 (Moderate)
Target Price	4.79+0.14 = 4.93 (PE 16.0, EPS 0.2995, DPS 0.14)
Decision	Not interested unless queue to sell volume above 4.8 is low
Comment	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 Price	4.8
Second Support Price	4.6
Risk Rating	MODERATE

Research House

HwangDBS Target Price	5.6 (2011-03-23)
Credit Suisse Target Price	6.1 (2011-03-30)
MIDF Target Price	5.7 (2011-06-01)
HLG Target Price	5.6 (2011-06-07)
AMMB Target Price	6.24 (2011-07-05)
OSK Target Price	5.77 (2011-08-18)
CIMB Target Price	5.8 (2011-08-24)
ECM Target Price	5.87 (2011-08-24)
JF Apex Target Price	5.29 (2011-08-24)
Kenanga Target Price	5.45 (2011-08-24)
Maybank Target Price	5.5 (2011-08-24)
TA Target Price	5.95 (2011-08-24)
UOB Target Price	5.5 (2011-08-24)
RHB Target Price	5.35 (2011-09-13)

Accounting Ratio

Return on Equity	7.11%
Dividend Yield	2.92%
Profit Margin	24.96%
Tax Rate	24.31%
Asset Turnover	0.4086
Net Asset Value Per Share	2.25
Net Tangible Asset per share	1.35
Price/Net Tangible Asset Per Share	3.69
Cash Per Share	0.76
Liquidity Current Ratio	1.2802
Liquidity Quick Ratio	1.253
Liquidity Cash Ratio	0.9395
Gearing Debt to Equity Ratio	0.9578
Gearing Debt to Asset Ratio	0.4682
Working capital per thousand Ringgit sale	12.0%
Days to sell the inventory	10
Days to collect the receivables	41
Days to pay the payables	273

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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