Highlights From Analyst & Investor Day 2014
Company Update
We attended Axiata’s Analyst & Investor Day 2014 yesterday and came away feeling more upbeat on the group’s growth prospects notwithstanding our NEUTRAL call due to limited upside (+3.8%) based on our MYR7.30 SOP TP. Nonetheless, Celcom is prepared to return with a bang with a slew of new products, while XL has made excellent progress on its integration with Axis. Competition remains a key risk.
Digi.com (DIGI MK, BUY, TP: MYR6.50)
Expect Another Good Quarter
Results Preview
We do not expect any surprises from DiGi’s upcoming 3QFY14 results. We maintain our BUY call and MYR6.50 DDM-based TP, reflecting 11% upside. For 3QFY14, we expect revenue growth to be sustained at 5.0% (1HFY14: +5.0%) and earnings to grow 9.0% y-o-y, partly boosted by a low effective tax base in 3QFY13. A stable competitive environment and continued growth in mobile internet growth are key drivers, in our view.
LPI Capital (LPI MK, BUY, TP: MYR20.70)
Stable Results, Expect Dividends In 4Q
Results Review
LPI’s MYR166m 9M14 profit, at 75% of our/consensus estimates, is in line. Despite soft topline growth, the 11% bottomline increase was aided by a 210bps improvement in underwriting (UW) margin and expansion of its profitable fire insurance unit. Maintain BUY, and a MYR20.70 TP (18x P/E, 18.4% upside). We expect in 4Q14 an interim dividend/share similar to 4Q13’s MYR0.52 to help fulfil our assumption of a >5% yield.
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