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Alliance IB Research maintains Neutral on Axiata, raises target price

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Alliance IB Research maintains Neutral on Axiata, raises target price Empty Alliance IB Research maintains Neutral on Axiata, raises target price

Post by Cals Fri 27 Sep 2013, 09:58

Alliance IB Research maintains Neutral on Axiata, raises target price
Business & Markets 2013
Written by theedgemalaysia.com   
Friday, 27 September 2013 08:53
KUALA LUMPUR (Sept 27): Alliance IB Research has maintained Neutral on Axiata Group Bhd at RM6.91 with a higher target price of RM6.70 (from RM6.40) after XL, a 66.5%-owned subsidiary of Axiata, had finally entered into a conditional sale and purchase agreement with Saudi Telecom to acquire Axis for total consideration of US$865 million.
In a note Friday, the research house said that although not earnings accretive in the near term, it was still positive on the acquisition as it will help to improve the quality of XL’s network and efficiency of its capex deployment, which is crucial for the long-term competiveness of XL in Indonesia.
“We reduce our earnings forecast for Axiata in FY14 by -1.9% (loss of interest income and negative contribution by Axis), but raise FY15 earnings by 4.6% instead (opex/capex savings by XL).
“Post earnings adjustment, our SOP-based TP for Axiata is raised to RM6.70 (from RM6.40). Maintain Neutral recommendation given the lack of re-rating catalysts in the near term,” it said.
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