DIGI’s share price – which has rebounded from a recent low of RM3.19 in mid-October this year to as high as RM3.92 on 11
November before coming under pressure yesterday – remains on an upward trajectory.
On the chart, the stock is expected to climb further inside a short-term ascending price channel after bouncing off from the
200-day SMA, thus offering a trading buy opportunity following yesterday’s price weakness. A resumption of the upward trend could then lift the shares to reach the resistance thresholds of RM4.16 and RM4.31.
Kenanga says its stop loss price level is pegged at RM3.43 (representing a 9% downside risk from its last traded price of RM3.78). Earnings-wise, DIGI – a mobile connectivity and internet services provider in Malaysia – announced a net profit of RM264.5m (- 15% YoY) in 3QFY22, taking 1HFY22 bottomline to RM720.7m (-16% YoY) as its underlying performance was mainly affected by the imposition of a one-off prosperity tax by the government.
According to consensus estimates, the group is forecasted to log net earnings of RM1.0b in FY December 2022 and RM1.2b
in FY December 2023, translating to forward PERs of 29.3x this year and 24.0x next year, respectively (with its 1-year rolling
forward PER currently hovering near its historical mean).
Additionally, consensus is anticipating DIGI to make dividend payments of 12.9 sen per share for FY22 and 15.5 sen per
share for FY23, implying forward dividend yields of 3.4% and 4.1%, respectively.
