MIDF said it is keeping its NEUTRAL recommendation on Axiata with an unchanged SOP-derived target price of RM2.42 post the announcement of 3QFY23 results. Evidently, the group has yet been able to fill the void after the deconsolidation of Celcom. This may not be achieved in the near-term. It said fortunately, some of the main operation cost performed better while both Link Net and Boost were loss-making.
Axiata’s 4QFY23 normalised earnings came in at RM 287m, a decline of -36.5%yoy. This was mainly due to higher taxation and higher finance cost. Not as bad as expected. Cumulatively, FY23 normalised earnings shrunk by –64.6%yoy to RM542m. This was mainly attributable to the lower share of result of CelcomDigi Bhd amounting to RM550m (- 57.8%yoy) and higher finance cost of RM2.3b. Nonetheless, Axiata FY23 financial performance came in better than conservative assumption of RM425.5m
The house makes slight revision in earnings estimates, with both FY24 and FY25 earnings estimates higher by about six percent each as MIDF said it factors in FY23 financial performance into its model. Conservative target price. While it updated its SOP table post the result announcement, the house made no changes to target price of RM2.42
