AXIATA GROUP BHD
year from the capacity expansion at its Ipoh plant.
On the property segment, UOB said sales for the third quarter rose 10.9% quarter-on-quarter (q-o-q) and 20% y-o-y on strong progress billings recorded from its six property in Skudai, Pulai, Senai-Kulai, Pasir Gudang, Melaka and Ipoh. Target Price: RM4.65
edotco PAKISTAN, a wholly-owned subsidiary of Axiata Group Bhd’s subsidiary edotco Group Sdn Bhd, has entered into an agreement with Tower Share (Private) Ltd to acquire 100% of its subsidiary, Tanzanite Tower Private Limited (TTPL) for a cash consideration of US$90mil (RM385.4mil).
HLIB Research said that the proposed acquisition will be funded through internally generated funds. The deal is subject to multi regulatory approvals and expected to complete in 3Q17.
The research house said that funding would not be a concern and is supported by war chest injected by new investors, namely Innovation Network Corp of Japan and Retirement Fund Inc with US$400mil and US$100mil, respectively.
HLIB said the proposed acquisi- tion would strengthen edotco Pakistan’s position to accelerate tower build out and take advantage of further acquisition or consolidation opportunities towards achieving its ambition to be the largest independent tower company in Pakistan.
It said that the development marked edotco’s first tower asset in Pakistan since inception in 2015.
Pakistan is one of the few countries which is expected to see moderate growth leveraging on its huge population of 193 mil, low mobile penetration rate of about 71%, 3/4G at infancy stage and low smartphone adoption of 9.2%.
Post-acquisition, HLIB said it would increase edotco’s tower portfolio by 4% to 18.1k towers.
Potential for improvement as the market is dominated by 4 major cellcos, namely Jazz (Mobilink and Warid), Telenor, Zong and Ufone. Catalysts
The catalysts are higher smartphone penetration boosting data ARPU, strong growth in low penetration developing market, penetration into new markets and in-country consolidations.
HLIB said it maintained its “hold” call on Axiata with target price of RM4.65.
Regional exposure with focus on emerging countries with great growth potentials. However, regulatory and execution risks are major concerns.