Rabu, 12 Februari 2014

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The Star Online: Business

Maxis’ dividend still attractive

Posted: 12 Feb 2014 08:00 AM PST

PETALING JAYA: Although Maxis Bhd registered a marginally lower net profit for the financial year ended Dec 31, 2013, the telecoms service provider continues to appeal with its attractive dividend yield.

Maxis recorded a marginally lower net profit of RM1.76bil, or 23.5 sen earnings per share, compared with RM1.85bil, or 24.7 sen earnings per share, a year ago. Revenue for the year stood at RM9.08bil, a 1.3% growth from the RM8.96bil recorded previously.

Analysts expect the earnings of the company to continue to come under pressure but its dividend yields could apppeal to investors.

Maybank IB Research opined that Maxis would likely continue to lose market share in the prepaid segment, while its postpaid trends remained encouraging. It said Maxis' management initiatives to improve distribution and boost brand perception will take time to execute.

"We expect Maxis to again deliver sub-industry revenue growth in 2014. In our view, Maxis' relatively attractive dividend yield of 5.7% remains its only appeal for now," it said, adding that it assumed a flat revenue for Maxis in 2014.

CIMB Research said Maxis' financial year 2013 core net profit was within its and consensus expectations at 97% and 96% of estimates, respectively.

"As expected, revenues were weak due to net churns and lower average revenue per user (Arpu), with no signs of visible recovery. As a result, Maxis ceded more market share to DiGi," CIMB analyst Kelvin Goh said in a report.

He said Maxis reiterated its guidance of a weak first half for 2014, as it restructures before recovering in the second half. It expects service revenue to rise in the low single-digit range, which CIMB concurred with.

"We believe Maxis' issues are deep-rooted and will take time to resolve, and for results to emerge, it has to address issues with its distribution system and re-engage segments that have been neglected.

"We still think Maxis is in a leading position in terms of revenue, but is being threatened by Celcom," Goh said.

Maxis remains a "hold" for CIMB, as it lacks re-rating catalysts, while downside risk has been reduced by its attractive dividend yields. DiGi remains the house's top Malaysian telco pick.

PublicInvest Research, meanwhile, said Maxis' relatively attractive dividend yield of 5.7% would provide some support for its share price.

Latest data compiled by Bloomberg showed there are 15 analysts with a "sell" call on Maxis, 15 with a "hold" and five with a "buy".

The financial results released by the integrated telecoms service provider for the year ended Dec 31, 2013 (FY13) announced on Tuesday did not help in a re-rating.

Despite having posted a lower net profit, Maxis declared a total net dividend of 40 sen for FY13, translating into a dividend yield of 5.76% based on yesterday's closing price of RM6.95.

Although Maxis subscribers declined to 12.89 million as at end-December 2013, its blended Arpu was stable at RM49.

Analysts said Maxis' full-year results were relatively weak compared with its peers, which have been gaining market share at the expense of Maxis. Celcom Axiata Bhd has overtaken Maxis as the country's largest celco by subscribers with 13.5 million as at Sept 30, 2013. DiGi.Com Bhd's FY13 earnings grew by 41.67% to RM1.7bil from RM1.2bil a year ago, while revenue climbed 5.81% to RM6.73bil as opposed to RM6.36bil in FY12.

Nevertheless, analysts are optimistic that the telco under the helm of chief executive officer Morten Lundal could improve the company, although it might take some time. Lundal has announced initiatives to improve its distribution, a capital expenditure of more than RM1bil to deliver best network experience and key IT initiatives, among others.

After strong Q3, Lenovo says acquisitions to hit short-term performance

Posted: 12 Feb 2014 07:20 PM PST

BEIJING: China's Lenovo Group Ltd said third-quarter profit jumped nearly a third, beating estimates, as the world's biggest maker of personal computers hoisted sales of smartphones in its drive to diversify out of the shrinking PC market.

Lenovo on Thursday reported net income rose 29% to US$265.3mil for the October-December quarter.

That was before it agreed to spend US$5.2bil on smartphone and servers businesses in two acquisitions in January, a spree that CEO Yang Yuanqing warned will weigh on his company's finances in the near term.

Both the businesses Lenovo bought currently lose money.

"In the short term (the deals) will have a negative impact on performance," Yang said in a telephone interview after the earnings were announced. Lenovo later specified it will likely take three to five quarters to turn around the Motorola phone business it bought from Google Inc for US$2.9bil.

Lenovo has been aggressively pushing into smartphones and servers to offset the global decline in the desktop PC business as consumers switch to mobile devices. As well as the Motorola deal, it agreed to buy IBM Corp's low-end server unit for US$2.3bil.

The net profit for October-December was well above the US$204.9mil Lenovo posted a year earlier, as well as a $247.2 million consensus forecast on Thomson Reuters Starmine SmartEstimate.

Analysts see tougher times ahead, saying it may take the company at least a year to turn around its acquisitions. Heavyweights like Samsung Electronics Co and Apple Inc, dominant in global smartphones, will also provide stiff competition as Lenovo seeks to build up that business.

"I'm expecting a slowdown in the underlying, organic business," said Jean-Louis Lafayeedney, a Hong Kong-based technology analyst at JI Asia, an affiliate of Societe Generale. "It will be at least a year before Lenovo can turn around growth," the analyst said, speaking before the October-December earnings were announced.

The speed and scale of the buying spree – worth nearly half of Lenovo's market value and partly paid for by issuing new shares – has spooked some investors. The company's shares have dropped 6.04% since the start of the year, compared with the Hong Kong index's loss of 4.65%.

In early trading on Thursday, the stock was down 1.27%, while the index was off 0.51% – Reuters.

Perdana Petroleum up on higher earnings expectations

Posted: 12 Feb 2014 07:14 PM PST

KUALA LUMPUR: Shares of Perdana Petroleum rose at mid-morning on Thursday on expectations of higher quarterly earnings, as well as Buy calls from analysts.

At 11.07am, its shares rose 15 sen to RM1.93 with some 12.7 million shares traded between the prices of RM1.79 and RM1.96.

The FBM KLCI was down 4.66 points to 1,820.98. Turnover was 1.13 billion shares valued at RM622.07mil. There were 227 gainers, 350 decliners and 273 counters unchanged.

Maybank KE Research has maintained its Buy on the group with a target price of RM2.55 following 11%-32% rise in its FY13-FY15 earnings forecasts.

"We expect this outperformance to be fuelled by higher utilisation and lower operating expenses.

"For 2014, Perdana will realise RM20mil in savings from the disposal of eight ageing OSVs and the purchase of three OSVs  from its sale & leaseback scheme in 2013.

"Its balance sheet and cash flow have improved and Perdana is well positioned to expand its fleet size. It has the capacity to add 2-3 new OSVs to its fleet as it leverages on Petronas increasing capex and EOR works in Malaysia," it said.

Kredit: www.thestar.com.my

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