Maxis Bhd’s core net profit rose 12% year-on-year to RM869 million for the first half of financial year 2026 (1HFY26), in what Kenanga Research said was within expectations. The increase was supported by resilient postpaid growth, stronger enterprise services and continued cost discipline.
The earnings represented 57% of its FY26 forecast and 54% of consensus estimates, putting the telecommunications group on track to meet its full-year targets.
The research house, however, expects a softer second half, mainly due to the anticipated commencement of equity accounting for Digital Nasional Bhd (DNB) from the fourth quarter of FY26.
Maxis declared a second-quarter dividend of four sen per share, bringing its 1HFY26 dividend to eight sen, unchanged from the corresponding period last year and in line with Kenanga’s expectations.
Maxis’ 1HFY26 service revenue grew 2.7% year-on-year, in line with its full-year guidance of low-single-digit growth.
Kenanga said the expansion was primarily driven by continued growth in the postpaid segment, supported by an expanding subscriber base and the introduction of products catering to different customer segments.
The group’s enterprise fixed and solutions business also contributed, with growth underpinned by managed services, cloud connectivity and digital solutions.
At the earnings level, stronger service revenue combined with continued operating discipline lifted 1HFY26 EBITDA by 4% year-on-year, keeping Maxis on track to achieve its full-year low-single-digit EBITDA growth guidance.
Kenanga said deeper integration of artificial intelligence into Maxis’ operations and network infrastructure had also supported operating cost savings.
Lower depreciation and interest expenses, together with the stronger EBITDA performance, subsequently supported the 12% growth in core net profit.
Maxis continued to see positive momentum across its mobile and home fibre businesses during the second quarter.
Postpaid net additions increased to 28,000, extending the sequential growth trend and marking an uninterrupted quarterly streak since 2QFY21.
Prepaid net additions also rebounded to 23,000, reversing the customer churn recorded in the first quarter.
Average revenue per user (ARPU) remained broadly stable sequentially for both postpaid and prepaid services, supported by the launch of new plans offering refreshed data propositions and higher value.
Home fibre net additions remained positive at 6,000 in 2QFY26, while ARPU increased to RM109, from RM108 in the previous quarter, driven by higher adoption of faster-speed plans.
Kenanga said Maxis is positive on the upcoming implementation of the Malaysian Communications and Multimedia Commission’s (MCMC) mandatory prepaid registration requirements.
The group expects the resulting consolidation of SIM cards to support higher ARPU, while lower subscriber churn could reduce customer acquisition and retention costs.
Maxis also expects to begin equity-accounting for DNB by 4QCY26, with capital expenditure for DNB’s 5G network densification likely to be financed primarily through debt raised at the network operator level.
Meanwhile, Maxis has secured a three-year renewal from Telekom Malaysia Bhd (TM) covering 4G Multi-Operator Core Network (MOCN), as well as domestic 4G and 2G roaming services.
Revenue from the renewed arrangement will be classified under Maxis’ enterprise fixed and solutions segment.
Following the results, Kenanga raised its FY26 earnings forecast by 5.3%, primarily reflecting the delayed commencement of DNB equity accounting, which is now expected to begin in 4QFY26 in line with Maxis’ latest guidance.
The research house also raised its target price to RM3.70 from RM3.63, after rolling forward its valuation base year to FY27F, based on an unchanged 9 times forward EV/EBITDA multiple.
Despite the stronger earnings performance, Kenanga maintained its MARKET PERFORM recommendation.
It said Maxis had delivered solid EBITDA growth, supported by cost efficiencies, but remained cautious about the group’s longer-term growth trajectory due to a high base effect and potential margin pressure from increasing utilisation of DNB’s 5G network.
Kenanga also highlighted Maxis’ relatively smaller subscriber base, estimated at around 30% below that of its key competitor, which limits its ability to spread fixed costs such as spectrum, 5G access fees and network maintenance.
As the industry transitions to the new 5G framework, the research house believes Maxis could therefore be more exposed to rising costs.
Key risks to the recommendation include irrational competition among mobile operators, market share and margin erosion from intensifying competition for convergence customers, and slower-than-expected 5G adoption among Maxis’ enterprise customers, particularly SMEs facing significant technology investment requirements and reluctance to overhaul legacy processes.
