Axiata Group Bhd has shown promising growth in its prepaid Average Revenue Per User (ARPU) and subscriber base, according to reports by Kenanga Investment Bank (Kenanga). The company's advancements in artificial intelligence (AI) for personalised marketing and dynamic pricing have contributed to an impressive rise in prepaid net additions and ARPU expansion. Despite some regulatory and macroeconomic challenges, Axiata remains optimistic about sustaining its growth trajectory in the second half of Fiscal Year 2024 (2HFY24).

Kenanga maintains its OUTPERFORM rating for Axiata with a target price of RM3.00. The bank highlights Axiata's strong performance in prepaid ARPU and its strategic use of AI to enhance customer engagement and revenue growth. The forecasted target price reflects confidence in Axiata's ability to leverage its digital capabilities and maintain competitive advantages in the telecommunications sector.

Axiata's second quarter Fiscal Year 2024 (2QFY24) results showed a significant increase in prepaid net additions to 868,000, driven by improved network quality and minimal churn. The company's focus on high-quality customer acquisition and personalised marketing through AI has resulted in a substantial ARPU growth. While XL anticipates higher costs in 2HFY24 and is cautious about macroeconomic pressures, it is poised to benefit from continued demand for its services and effective AI-driven pricing strategies.

The company is also navigating regulatory adjustments and competition from unlicensed internet service providers (ISPs), but it remains engaged with authorities to address these issues. Despite these challenges, Axiata's robust growth prospects and digital transformation initiatives provide a solid foundation for its positive outlook.