OSK Research maintains Maxis TP at RM5.40

OSK Research is maintaining its target price of RM5.40 for Maxis Bhd with limited upside seen from the last traded price of RM5.29.

The research house said on Wednesday, Dec 1 Maxis reported flattish 3QFY10 and FY10 core earnings y-o-y of RM613 million and RM1.7 billion respectively. Core 9MFY10 earnings, when annualised, were 5% to 6% below its and consensus forecast.

“Backing off the interconnect revenue loss, we estimate Maxis’ underlying mobile revenue grew some 2.2% q-o-q, reflecting the contraction in voice revenue but upheld by strong data revenue growth. This is on par with the normalised q-o-q growth witnessed by both Celcom and Digi of 2%-3.5%. An expected eight sen/share quarterly DPS has been declared, payable on Dec 30. (YTD DPS : 24 sen/share),” it said.

OSK Research said Maxis’ 3QFY10 results reflected sharply lower World Cup related costs and falling interconnection costs, which brought its 9MFY10 numbers broadly in line with consensus and our forecasts.

The research house said Maxis was not spared the systemic weakness in industry voice revenue, with topline growth trickling down to 1.1% q-o-q in 3Q10. The key positive was the mobile broadband segment, where revenue more than doubled y-o-y.

“We are retaining our forecast and expect some pressure on margins in 4Q10 from the iPhone 4 launch and pick-up in year-end acquisitions. NEUTRAL,” it said.