NST Online Business Times : latest

Posted: 10 Feb 2014 05:49 PM PST

KUALA LUMPUR: RHB Research keeps its 'buy' rating on DiGi.Com Bhd, with an unchanged fair value of MYR5.60.

RHB said the company's 2014 revenue growth on the back of solid data growth stands out among its local peers, while its financial year 2014 dividend yield of 5 per cent is decent.

The research house added that management appears upbeat on plans for 2014, and is prepared to spend more on capex to capitalise on recently modernised network to generate more data growth.

"The prepaid segment saw good growth in financial year 2013, but postpaid contribution will likely increase now that DiGi is armed with better capacity and coverage. It will focus on ramping up network population coverage.

"Although this would involve more capex, we think this is the right approach, as it will enable the telco to better monetise data by serving areas that are currently underserved, as well as close the gap with peers and increase scale.

"By year-end, management expects 3G coverage to reach 86 per cent (from 80 per cent currently vs peers' >85 per cent) and roll out 1,000 LTE sites, said RHB in a report today.

According to RHB, DiGi has generally held back on driving postpaid subscriber growth, but this looks likely to change.

"Armed with better capacity and coverage, we think it could become more aggressive in postpaid – something it was unable to push for prior to the completion of its network modernisation in third quarter of 2013.

"Management expects earning margins to remain stable going forward. We understand that DiGi is beginning to see some scale in data, given that mobile internet in fourth quarter of 2013 expanded by 2-3 times compared to first quarter of 2012," added RHB.

RHB said that ongoing efforts to increase fiberisation of sites in collaboration with Celcom (3,000km already jointly rolled out and expected to reach 10,000km by 2016) present another opportunity to reap cost savings.

Hold Petronas Gas: AmeSecurities

Posted: 10 Feb 2014 06:23 PM PST

KUALA LUMPUR: AmeSecurities maintains its 'hold' recommendation on Petronas Gas (PGas) with an unchanged fair value of RM24.30 per share.

The research house said PGas new gas processing and transmission agreement will commence in April, but the new pricing mechanism will be similar to the current model, which had provided a significant earnings boost back in 2010-2011.

Additionally, the final investment decision for the proposed Lahad Datu Regassification Terminal's (RGT) is uncertain, following the incursion by Sulu rebels earlier last year.

It noted that PGas' financial year 2014 forward earnings are to contract due to the normalisation of corporate tax rate as financial year 2013 enjoyed the Lekas RGT's RM626 million investment allowance plus deferred tax write-backs.

"While awaiting Petronas' final investment decision by first quarter of 2014, we understand that the capacity of the Pengerang Onshore RGT may not be significantly larger than the Lekas terminal, which was built on a jetty.

"Based on an overall cost of RM4billion, project internal rate of return of 9 per cent, equity discount rate of 10 per cent and debt to equity ratio of 80:20, this project could potentially raise the group's stock valuation by 64 sen," AmeSecurities said.

Kredit: www.nst.com.my

Isnin, 10 Februari 2014

NST Online Business Times : latest

NST Online Business Times : latest

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