Maxis Berhad's (MAXIS) 1HFY24 financial results met expectations, bolstered by stringent cost control measures. Despite this, the outlook suggests potential challenges ahead. MAXIS reported a core net profit of RM720 million for the first half of FY24, representing 55% of the full-year forecast and 53% of consensus estimates. The company declared a 2QFY24 dividend per share (DPS) of 4 sen, maintaining the same level as the previous year.
Analysts have adjusted their ratings and target prices for MAXIS. One analyst has downgraded MAXIS to a MARKET PERFORM with a reduced target price of RM3.74, down from RM5.30, citing concerns over the company's high valuations and competitive pressures from its peers. The firm's revised target price reflects a 29% decrease, primarily due to the anticipated impacts of ongoing 5G capital expenditure and competitive market dynamics.
Similarly, another analyst has maintained a HOLD rating but reduced its target price to RM3.70, highlighting the heightened risk associated with 5G investments and advising caution.
MAXIS's 1HFY24 results indicate modest growth, with service revenue up by 1.1% year-on-year. The growth is driven by increased enterprise solutions and a larger consumer postpaid subscriber base. Despite this, the company faces competitive pressures and potential erosion of its premium valuation. The firm's future prospects depend on successful monetisation of 5G services and strategic expansions, including its bid for new 5G spectrum rights.