Thesun 2009-08-13 Page16 Maxis Likely To Relist In Its Entirety Says Ecm Libra

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theSun

| THURSDAY AUGUST 13 2009

business

AirAsia’s core operating profit up 328%

Mah Sing to undertake RM690mil project in Cyberjaya

KUALA LUMPUR: AirAsia Berhad yesterday announced that it has recorded a core operating profit of RM128 million for the quarter period ended June 30, 2009, a 328% increase compared with the same period the year before. Group CEO Tony Fernandes said: “Revenue for the quarter grew by 8% to RM657 million driven by robust passenger growth and ancillary income. The core operating profit of RM128 million was more than quadruple the profits achieved in the same period last year.” He added: “Our results stand in stark contrast to those of most legacy carriers in these troubled economic times. While major legacy carriers are cutting flights, grounding planes, retrenching staff and reporting massive losses, AirAsia is, on the contrary, seeing rising demand, adding more routes, increasing frequency and securing higher profits.” “Passenger numbers for the period grew by 24% to 3.5 million, largely in response to our three-prong strategy of lowering fares, stimulating travel with innovative and creative marketing and capturing market share. Despite lowering fares by an average of 19%, we still managed to produce strong profit growth with industry leading margins.”

KUALA LUMPUR: Mah Sing Group Bhd will develop a gated residential development project in Cyberjaya with a gross development value (GDV) of RM690 million. Mah Sing via its wholly-owned subsidiary, Myvilla Development Sdn Bhd, is acquiring 46.1ha of prime freehold land in Cyberjaya from Cyberview Sdn Bhd and Setia Haruman Sdn Bhd for RM130.5 million for the project. Mah Sing also has the option to purchase 6.32 acres of adjacent commercial land at RM79 per sq ft within six months from the date of the signing of the sales and purchase

AMMB set to record high earnings for FY10 KUALA LUMPUR: AMMB Holdings Bhd, which posted a 27% increase in net profit for the first quarter ended June 30, 2009, is expected to continue a record positive growth for 2010, said OSK Research yesterday. “We are upgrading our financial year 2010 earnings forecast by 4.7% on the back of an exceptional strength in its first quarter result. We have imputed a stronger investment banking income growth contribution assumptions,” OSK Research explained in its note released yesterday. AMMB’s first quarter performance was above the expectations of analysts. On an annualised basis, its earnings were 25.3% and 19.1% above consensus and the full year forecast of OSK Research. – Bernama

BCBH’s half-year net profit up 7.8% KUALA LUMPUR: Bumiputra-Commerce Holdings Bhd (BCHB) reported a net profit of RM1.277 billion for the six months ended June 30, 2009, representing a 7.8% year-on-year growth. Earnings per share stood at 36.2 sen. Annualised net return on equity (ROE) was 14.%, well ahead of the group’s 2009 key performance indicator target of 12.5%, the company said in a statement. “We are pleased to record another quarter that’s well ahead of targets,” said,” BCHB Group chief executive officer Datuk Seri Nazir Razak. He said CIMB-Niaga’s contribution in the second quarter surged on the back of improved net interest margins and strong treasury income growth. – Bernama

agreement. “The acquisition of the Cyberjaya land is timely as the property market is stabilising and should recover by the middle of next year. We need to plan and now is a good time to move forward,” Mah Sing’s group managing director/chief executive Tan Sri Leong Hoy Kum told a media briefing yesterday. On another note, Leong viewed Permodalan Nasional Bhd’s (PNB) investment in the group as a strategic investment that will provide more commercial ventures. “This (the investment) will lead us to possible opportunities for the two parties to work

together on commercial ventures.” In June, Mah Sing said the group was talking to PNB, the nation’s biggest fund manager, for projects in the Klang Valley and both are eyeing potential land banks. PNB acquired substantial shareholding in Mah Sing in mid-January, controlling about 31.4 million shares or 5.1%. PNB’s unit trust, Amanah Saham Bumiputra, became a substantial shareholder in Mah Sing in August last year, with 5.3% shareholding or 33.2 million shares. As of April 7, ASB increased its shareholding to 14.7% or 92.3 million shares. – Bernama

Maxis likely to relist in its entirety, says ECM Libra KUALA LUMPUR: Maxis is likely to relist in its entirety to maximise its market capitalisation which may fetch up to between RM40 billion and RM50 billion, to take advantage of rising investors’ risk appetite, says ECM Libra Investment Research. In an investment research note yesterday, ECM Libra also stated that valuations are quite attractive for Maxis to re-list now. “Pushing the case for its re-listing are richer market valuations as investors turn to stocks due to very low interest rates and the belief the global economy is on the mend,” ECM Libra added. ECM Libra highlighted that recent developments and market talk surrounding Maxis Communications Bhd point to a potential relisting before the end of the year. The research house said, should Maxis list in its entirety, Axiata would be the telco player most comparable given the similarities with both having domestic and foreign operations in India and Indonesia. However, Axiata, ECM Libra noted, has additional foreign mobile operations in Sri Lanka, Bangladesh, Cambodia and an associate in Singapore. “Axiata is currently trading at a price earnings (PE) multiple of 18.8 times its financial year 2009 consensus Earnings price per share (EPS),” ECM Libra said. In comparison, ECM Libra added, in 2007 when Maxis was privatised at RM15.60 per share, it was trading at a historical PE multiple

of 18.6 times based on its FY06 EPS. According to ECM Libra, this may signal that investors are willing to pay a premium for Axiata’s growth story and do the same for Maxis. ECM Libra also indicated that those willing to take a bet on Maxis and its management may opt to invest with the company for a more exciting growth story. The research house said Axiata’s stable of higher quality but more matured foreign assets offered more comfort for those also seeking growth but with a correspondingly less risk. “The relisting of Maxis will have very minimal impact on Telekom Malaysia (TM) given its constrasting business models and appeal. “TM’s earnings growth is somewhat tepid. But investors like TM for its high dividend yields and stability in earnings,” ECM Libra said. In the research note, ECM Libra also said while Maxis offered high growth potential, it had less stable earnings and is unlikely to pay generous dividends due to high capex needs. ECM Libra also said if Maxis were to list its domestic operations only – it thought this is unlikely – investors would have an alternative pure domestic mobile operator to invest in, besides DiGi. “We believe DiGi will not be marginalised entirely as it will continue to attract interest as a decent dividend yielding stock. “Even without special dividends, we expect DiGi to generate a dividend yield of 4.5%. With

special dividends, yields could be as high as 8.1%,” it added. As for the overall telecommunication sector, ECM Libra maintained its overweight stand on the sector. ECM Libra said there may be a potential earnings surprise for Axiata when its second quarter 2009 results are released towards the end of the month. “This may result in an upwards earnings revision given the turnaround in the global economy, leading to a potential re-rating of the stock,” it explained. The research house also suggested switching from Axiata to Maxis for those seeking the greatest risk-return trade-off. “If Maxis relists in its entirety, we suggest switching from Axiata to Maxis, given that its Indian and Indonesian operations are starting from smaller bases and offer the greatest growth potential. “As a result, Maxis will offer the highest potential for capital appreciation compared with Axiata,” ECM Libra noted. Nonetheless, investing in Maxis, ECM Libra said, carried a higher risk than Axiata as the formers foreign operations are not as established on account of being very competitive. “Maxis’ foreign operations are at greater risk should a consolidation occur in the overcrowded markets of India and Indonesia. “Investors seeking defensiveness should stay with TM or DiGi,” it said. – Bernama

DiGi banks on music to grow youth market Jordan feels ‘robbed’ after Schumacher U-turn pg 28

KUALA LUMPUR: DiGi Telecommunications Sdn Bhd, in a strategic move to capture a bigger share of the youth segment, yesterday introduced the DiGi Music Unlimited’s web and mobile music service. Head of Products and Segment Marketing Albern Murty said the new service provided DiGi a compelling platform to make greater inroads into the youth market. “With over 50% of the Malaysian population made up of youths, this segment is an important and growing market for DiGi,” he told reporters here after launching DiGi Music Unlimited. Murty said DiGi, which enjoyed a 27% market share, was planning to capture one third of the youth segment market. “We have built a strong affinity with this segment over the years and we look to create even more relevance by leveraging off the appeal of music which is a big part of their lives,” Murty said. He added that DiGi Music Unlimited was about providing customers a holistic social music experience that would shape the future of music consumption in this country. “It is a perfect example of delivering our value proposition of relevance through music, ease of use through accessibility via mobile phone and personal computer, all for RM5 per month. Murty said DiGi Music Unlimited customers would pay no data charges for browsing and downloads when they visit the website nor would they be charged for sharing playlists and tracks with friends via Short Message Service (SMS), e-mail and social networks. DiGi’s revenue in the last five years more than doubled to approximately RM4.8 billion and DiGi’s customer base as of June 30, 2009 stood at 7.2 million. DiGI is a wholly-owned subsidiary of DiGi.Com Bhd, which is listed on Bursa Malaysia Securities Bhd. – Bernama