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CIMB Research downgrades Maxis to Reduce, cuts target price to RM5.90

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CIMB Research downgrades Maxis to Reduce, cuts target price to RM5.90 Empty CIMB Research downgrades Maxis to Reduce, cuts target price to RM5.90

Post by Cals Tue 27 May 2014, 00:32

CIMB Research downgrades Maxis to Reduce, cuts target price to RM5.90
Business & Markets 2014
Written by theedgemalaysia.com   
Monday, 26 May 2014 09:52

KUALA LUMPUR (May 26): CIMB Research has downgraded Maxis Bhd to Reduce from Hold at RM6.90 with a lower target price of RM5.90 (from RM6.90) and said the 40 sen dividend per share (DPS) was not sustainable, and expect it to be cut to 30 sen in FY15 and FY16.

In a note May 25, the research house said that it gathered its recent meeting that Maxis would only pay dividends based on free cash flow, and does not intend to borrow more.

“We also gather that service revenue is likely to fall short of its guidance of zero to low single-digit growth.

“Our FY14-16 EPS is cut by 18-19% and FY15-16 DPS by 13-28% to 29 sen and 35 sen, respectively.

“Likely de-rating catalysts are cuts in dividends and financial guidance. Maxis’s P/E is the highest among its domestic peers which we think is not sustainable. Switch to DiGi,” it said.
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