Earnings outlook on Axiata raised on better Opco showing
PETALING JAYA: Kenanga Research has raised its earnings forecast for Axiata Group Bhd due to a recovery in the overall performance of its operating companies (Opcos).
In the nine-month period of financial year 2020 (FY20), Axiata’s profit after tax and minority interests of Rm547.2mil was above expectations, coming to 102% and 85% of Kenanga’s and consensus full-year estimate due to better-than-expected numbers from Celcom, Dialog and Ncell.
“Overall, all Opcos seem to be recovering from the effects of Covid-19 and the enforced movement restrictions in the respective countries.
“We opine that the group would revitalise its capital expenditure plans in enhancing its network capabilities and coverage.
“The group’s operational excellence initiatives appears to have reached its maturity, with management keeping from providing further details on its next course of action in terms of cost-saving efforts,” said Kenanga.
Meanwhile, the research house is unmoved by the group’s expectation to monetise edotco within the next three to five years.
This is as it is not the the first time it has mentioned spinning off the towerco business.
Kenanga has raised its FY20/FY21 earnings by 33%/32% on the better overall performance from most Opcos, especially Ncell.
It has raised its dividend assumption for the two years from 5.5 sen and 5.5 sen to seven sen and eight sen.
The research house has maintained its “market perform” call on it.