COMMENTS ON MAXIS BERHAD (6012)

FIGURE 1: MAXIS BERHAD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2018 annual report.

1.       GENERAL INTRO: Maxis is one of the major mobile network providers in Malaysia.

2.       NOTABLE POINTS:

a.       According to 2018 report, there are 3.14 million postpaid subscribers, average rate per user (ARPU) is RM93, average data usage per user is 11.2GB per month

b.      for prepaid, there are around 2 million customers, ARPU is RM 42, average data usage per user is 10.4GB per month

c.       in 2018 financial year, CAPEX was RM1,038 million, claimed to maintain lead as having the fastest 4G LTE network

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~9192 million in 2018 annual report, this is a high revenue company.

b.      SHARE PRICE: from 2015-2019, share price decreased from around RM7 to around RM5

c.       EARNING PER SHARE (EPS): earning per share in last 5 years decreased from 21.5 to 18.3sen

d.      FUTURE POTENTIAL/PROSPECTS: quite dependable and reliable counter, share price expected to be stable.

e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 1038 million, around 14% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2018 report, Maxis declared a total dividend payout of 20 sen per share, amounts to dividend yield of 3.81 % based on current share price.

b.      CONSISTENCY: consistent dividend payout, last five years (2015-2019) dividends declared constant at 20 sen per share.

c.       DIVIDEND PAYOUT RATIO: in 2018 financial year, Maxis paid out about 88% of its earnings to investors in the form of dividend.

5.       IS THE MANAGEMENT PERFORMANCE GOOD?

a.       RETURN ON EQUITY (ROE): in 2018 financial year, Maxis achieved a good return of shareholders’ equity, at 25.3%. However, it’s ROE has been decreasing in past 3 years from 45.2 to 25.3%.

b.      COST-TO-INCOME RATIO: cost-to-income ratio is high at about 288%.

6.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around RM 535.8 million, equivalent to RM 0.07 per share

b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is very well supported by institutional investors, there are 30 institutional investors at top 30 major shareholders list, including EPF (11.07%) and PERMODALAN NASIONAL BERHAD (0.25%), SKIM AMANAH SAHAM BUMIPUTERA (8.05%), KUMPULAN WANG PERSARAAN (1.39%), BGSM EQUITY HOLDINGS SDN BHD (62.37%) and insurance companies and investment funds.

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