Maybank Investment Bank (Maybank IB) Research has maintained a “hold” call for Digi.Com Bhd (Digi) after the company’s commendable results for the first half of 2018 (1H18).
The investment bank said Digi’s results were in line with its and consensus expectations, as revenue trends remained resilient.
“Unsurprisingly, management has raised its previously conservative 2018 revenue guidance,” Maybank IB said in a research note, adding, it reiterated an unchanged target price of RM4.80.
Public Investment Bank Bhd (PIBB) said Digi’s 1H18 core profit stood at RM810 million after stripping out RM39.6 million non-operating cost for network transition.
“The profit was within expectations and accounted for 54 per cent and 55 per cent of our and consensus full-year estimates respectively.
“The stronger earnings were mainly due to higher postpaid revenue as subscriber base jumped 15.8 per cent year-on-year on a slight decline in average revenue per user, while costs were lower,” it said.
PIBB maintained a “buy” call on Digi with a RM5.00 target price.
Meanwhile, RHB Research upgraded Digi to “buy” from “neutral” with a target price of RM5.50 target from RM4.85.
“Digi is now our preferred mobile exposure in Malaysia and we raise the financial year 2018/2020 forecast core earnings by six to nine per cent to better reflect the longer-term cost efficiencies (resulting) from in-sourcing of network services and better data monetisation prospects,” it added.