Hot Stock DiGi rises 4% on FY13 results, dividend

by **Cals** Fri 07 Feb 2014, 11:35

Hot Stock DiGi rises 4% on FY13 results, dividend

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Friday, 07 February 2014 11:20

KUALA LUMPUR (Jan 7): DiGi.Com Bhd rose as much as 4% after the mobile telecommunication network provider reported full-year financials which beat market forecast. Its dividend has also supported the stock's advance.

At 11.01am, DiGi reduced gains to RM5 with some 10 million shares done. The bourse's ninth-largest gainer had earlier risen as much as 18 sen to RM5.03.

DiGi said yesterday net profit jumped 123% to RM548.52 million in the fourth quarter ended December 31, 2013 (4QFY13) from RM245.52 million a year earlier. Revenue rose to RM1.73 billion from RM1.63 billion.

Full-year net profit climbed to RM1.71 billion from RM1.21 billion a year earlier. Revenue was higher at RM6.73 billion versus RM6.36 billion.

DiGi plans to reward shareholders with a tax-free dividend of seven sen a share for 4QFY13. This brings full-year dividends to 21.3 sen.

CIMB Investment Bank Bhd analyst Kelvin Goh said DiGi's FY13 core net profit had surpassed CIMB's and consensus estimates by 5% and 4% respectively.

In a note today, Goh said this was "due to lower-than-expected tax arising from government incentives".

"It declared 7 sen in dividend per share (DPS) to total 21.3 sen, a little above our estimate of 20 sen. More importantly, DiGi’s FY14 depreciation and amortisation (D&A) guidance is significantly lower than our estimates.

"This has compelled us to raise both our FY14-15 EPS and DPS estimates by 7 % but (that) does not impact our DCF (discounted cash flow)-based target price (TP) as D&A is a non-cash item," Goh said.

CIMB has a TP of RM5.74 for DiGi shares with an unchanged "Add" call for the stock.

Meanwhile, Hong Leong Investment Bank Bhd analyst Tan J Young said DiGi's FY13 "core net profit of RM1,612m came in within expectations".

In a note today, Tan said the core figure accounted for 100.8% and and 95.1% of Hong Leong's and consensus full-year forecast respectively.

"Updated model based on latest data resulting (in) marginal revision of FY14 EPS by -1.4% while FY15 remained unchanged," Tan said.

Hong Leong has however maintained its "hold" call for DiGi shares with an unchanged target price of RM4.94.