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NewsHong Leong IB Research upgrades DiGi, raises target price to RM5.77
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Hong Leong IB Research upgrades DiGi, raises target price to RM5.77
by Cals Mon 28 Apr 2014, 13:09
| Hong Leong IB Research upgrades DiGi, raises target price to RM5.77 |
| Business & Markets 2014 |
| Written by theedgemalaysia.com |
| Monday, 28 April 2014 08:39 |
KUALA LUMPUR (April 28): Hong Leong IB Research has upgraded DiGi.Com Bhd to Trading Buy (from Hold) with higher target price of RM5.77 (from RM4.94) and said DiGi’s 1Q14 core net profit of RM485.2 million surprised on the upside, exceeding house and street’s full year estimates by 10.4% and 6.4% respectively, if annualised.
In a note Monday, the research house said DiGi declared a first interim tax exempt (single-tier) dividend of 6.2 sen (1Q13: 3.8 sen) with ex-date on May 9.
It said data contributed about 33.2% to overall sales, up 1.1 percentage points (ppt) quarter-on-quarter (q-o-q) as internet revenue growth sufficiently neutralized the fall in messaging revenue. MI turnover grew resiliently by 7.8% q-o-q topping RM374 million although smartphone penetration was relatively unchanged at 38.4% (+0.3 ppt q-o-q) implying increased consumption on the back of stronger data network coverage and quality.
“Rollouts: committed to 3G HSPA+ expansion with target of 86% population coverage (currently 82.2%) along with target of 86% population coverage (currently 82.2%) along with 1.5k LTE sites by end of FY14.
“Upgrade from Hold to Trading Buy after earnings upward revision and rolling over our valuations to FY15 which led to a higher target price of RM5.77, +16.8% from RM4.94,” it said.
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