Kenanga retains Axiata TP at RM6.72, ‘market perform’ call

Kenanga retains Axiata TP at RM6.72, ‘market perform’ call
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Tuesday, 27 August 2013 11:54

KUALA LUMPUR (August 27): Kenanga Research has retained its target price (TP) of RM6.72 for telecommunication firm Axiata Group Bhd's shares, and ‘market perform’ call for the stock.

In a note today, Kenanga analyst Cheow Ming Liang said its earnings forecast for Axiata during financial years ending December 31, 2013 (FY13) and 2014 (FY14) also remains unchanged, pending the upcoming release of Axiata's results for 2QFY13.

“We continue to be upbeat on Axiata’s plan to consolidate and list the tower infrastructure assets, which could potentially unlock its value as well as create synergies from the various joint monetisation opportunities

“However, given the different regulatory settings across multiple jurisdictions, we believe Axiata could face great challenges in the execution process,” Cheow said.

Cheow said Kenanga has maintained its TP of RM6.72 for Axiata based on an unchanged FY14 enterprise value - forward earnings before interest, taxes, depreciation and amortisation ratio of 8.2 times.

The analyst said the telecommunication company's consolidation and market ‘rebalancing’ strategy in Cambodia is expected to bear fruit in FY13.

Meanwhile, the group’s data business is expected to continue to be its main growth driver in 2013 especially in more mature markets.