Credit Suisse keeps bullish outlook on Maxis after meeting new CEO

Business & Markets 2013
Written by Jonathan Gan of theedgemalaysia.com
Thursday, 05 December 2013 15:05
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KUALA LUMPUR (Dec 5): Credit Suisse has given an outperform/buy rating for
Maxis Berhad with a target price (TP) of RM9 per share, although many other
analysts are giving it a "sell" call.
In the note today, the research house maintains its bullish outlook towards the
stock after meeting Maxis' new CEO, Morten Lundal.
According to the report, the CEO plans to address the issues of weakness in
prepaid market, data pricing, growth potential of the group and the home
segment.
“In our conversations with people who have worked with Morten (in various
other companies), he is known to have a strong execution record,” said in the
report.
“We take comfort from Morten’s emphasis on driving long-term EBITDA growth
(via acceleration in revenues) but at the same time, sustaining industry
profitability,”
Maxis retains its position as a leader in the postpaid segment and LTE
coverage amidst an attractive Malaysian market, said Credit Suisse.
The report places revenue growth at 1.5% and EBITDA growth at 0.9% for the
company compared to consensus estimates of 3.7% for revenue growth and
4% for EBITDA growth. Capital expenditure is also lifted to around RM1 billion.
Though Maxis currently has the highest proportion of "sell" ratings among
Malaysian telcos, Credit Suisse has decided to take a contrarian stance.
Its report noted that Maxis has introduced a 40 sen dividend in 2014E which the research house sees as sustainable provided Lundal
succeeds in driving EBITDA sufficiently.