Hot Stock Maxis falls 3% after repeated “sell” calls by some analysts

Business & Markets 2013
Written by Zatil Husna Wan Fauzi of theedgemalaysia.com
Friday, 06 December 2013 15:50
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KUALA LUMPUR (Dec 6): Maxis Bhd fell 3% after some analysts reiterated
their “sell” calls on the stock.
Analysts have been told by Maxis' newly appointed CEO Morten Lundal that the
major telco group will improve its distribution network and branding to defend its
prepaid market share.
While Maxis will incur higher expenditure on marketing and branding for the
next financial year, it is not expected to post much earnings growth.
At 3.13pm, Maxis was among the top losers. It fell 15 sen or 2.1% to RM7.06
with some 2.74 million shares done, after hitting low of RM6.99.
One of the research houses that have reiterated their “sell” call on Maxis is
RHB Research Institute.
In a note today, RHB Research said 2014 (FY14) will be a transition year for
Maxis as Lundal sets to transform it into a high performance company.
“This will partly lead to its 2014 capex rising to RM1.1 billion from the RM850
million for this year.
“Revenue growth will likely remain at the low single digits while its EBITDA
margin may see marginal erosion from increased marketing activities,” said the
research house.
RHB has reiterated its “sell” call with an unchanged fair value of RM5.90 on the
stock.
“Given the lack of earnings growth, Maxis’ appeal has always been its relatively generous dividend yields. However, without a strong
earnings growth profile, we think the stock lacks catalysts,” said RHB.