MIDF reaffirms DiGi's 'buy' on higher earnings [Business Times (Malaysia)]
(Business Times (Malaysia) Via Acquire Media NewsEdge) MIDF Research has reaffirmed its "buy" call on DiGi.Com Bhd on higher earnings achieved from its full-scale modernised network.
This led to an improved service quality, which in turn attracted a larger number of customers. Operating margin also continues to improve as the company efficiently manages its expenses, it added.
"The much awaited business trust proposal could be another positive catalyst that could further unlock the value of DiGi. There is no change to our target price of RM6.33," MIDF Research said in its note yesterday.
According to research house, DiGi's first quarter earnings amounted to RM485.2 million, an increase of 47.6 per cent, accounting for 28.1 per cent and 26.6 per cent of full-year earnings forecast, respectively.
Higher earnings were mainly attributable to lower depreciation and amortisation charges, which lifted earnings before interest and tax margin to 38.4 per cent.
It said DiGi raked in RM1.72 billion revenue in the first quarter on the back of wider subscribers' base of 10.9 million. Prepaid customers continued to be the driving force and expanded by 4.8 per cent to 9.2 million subscribers with new Internet bundled plans.
"Internet subscribers expanded by 31.6 per cent, or 958,000, to four million. This was mainly boosted by DiGi's mobile Internet subscribers, which grew by more than one third to 3.8 million."
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