Written by Joseph Chin
Wednesday, 23 September 2009 14:13
KUALA LUMPUR: Maxis Bhd's share price under its initial public offer (IPO) may trade around RM5 and RM6.20 assuming a price-to-earnings (PE) multiple range of between 16 times and 20 times based on ECM Libra Research's FY10 earnings per share (EPS) estimate.
"However, we believe Maxis will likely trade at around RM5.60 based on a PE multiple of 18 times, taking into account its mobile market leadership thus deserving premium valuation over DiGi (16 times), but a discount to TM’s fixed-line and broadband monopoly (20 times," it said in a research note issued on Sept 23.
ECM Libra Research said at a prospective RM5.60 per share, Maxis would generate minimum dividend yields of 4.2% in FY10. It added such yields were lower than its estimates for DiGi and TM, but perhaps investors might overlook this to have a stake in a blue-chip company that may fetch a market capitalisation of RM42 billion.
A draft prospectus lodged with the Securities Commission on Sept 17 outlined that Maxis Communications Bhd (MCB) would re-list only its Malaysian operations under an IPO involving 2.25 billion shares (30% of its paid-up share capital), of which 2.075 billion shares will be offered to institutional investors and the remaining 174.795 million shares to the public.
ECM Libra Research said the final IPO price however had not been fixed with news reports, quoting sources indicating the IPO was estimated to raise US$2 billion to US$2.5 billion (RM7 billion to RM9 billion) which implied an IPO price of RM3.11 to RM4. Other reports said the IPO shares may fetch as high as RM5 to RM6 each.
On Sept 17, a draft prospectus lodged with the Securities Commission which outlined that Maxis Communications Bhd's (MCB) decision to relist only Maxis Bhd, which comprised of its Malaysian operations.
The IPO involved 2.25 billion shares (30% of its paid-up share capital), of which 2.075 billion shares will be offered to institutional investors and the remaining 174.795 million shares to the public.
"What is clear however is that no new shares will be issued, implying Maxis will not receive a single sen from the IPO exercise. Instead, the proceeds will go to the shareholders looking to trim their stakes through the IPO exercise. This is perhaps not too surprising as the Indian and Indonesian operations which need the funds most are kept private for now, suggesting separate listing exercises in the future.
"However, MCB did manage to squeeze RM5 billion from Maxis via a prelisting restructuring exercise, which we believe will be used to fund the heavy capex of its foreign subsidiaries," ECM Libra Research said.
Wednesday, 23 September 2009 14:13
KUALA LUMPUR: Maxis Bhd's share price under its initial public offer (IPO) may trade around RM5 and RM6.20 assuming a price-to-earnings (PE) multiple range of between 16 times and 20 times based on ECM Libra Research's FY10 earnings per share (EPS) estimate.
"However, we believe Maxis will likely trade at around RM5.60 based on a PE multiple of 18 times, taking into account its mobile market leadership thus deserving premium valuation over DiGi (16 times), but a discount to TM’s fixed-line and broadband monopoly (20 times," it said in a research note issued on Sept 23.
ECM Libra Research said at a prospective RM5.60 per share, Maxis would generate minimum dividend yields of 4.2% in FY10. It added such yields were lower than its estimates for DiGi and TM, but perhaps investors might overlook this to have a stake in a blue-chip company that may fetch a market capitalisation of RM42 billion.
A draft prospectus lodged with the Securities Commission on Sept 17 outlined that Maxis Communications Bhd (MCB) would re-list only its Malaysian operations under an IPO involving 2.25 billion shares (30% of its paid-up share capital), of which 2.075 billion shares will be offered to institutional investors and the remaining 174.795 million shares to the public.
ECM Libra Research said the final IPO price however had not been fixed with news reports, quoting sources indicating the IPO was estimated to raise US$2 billion to US$2.5 billion (RM7 billion to RM9 billion) which implied an IPO price of RM3.11 to RM4. Other reports said the IPO shares may fetch as high as RM5 to RM6 each.
On Sept 17, a draft prospectus lodged with the Securities Commission which outlined that Maxis Communications Bhd's (MCB) decision to relist only Maxis Bhd, which comprised of its Malaysian operations.
The IPO involved 2.25 billion shares (30% of its paid-up share capital), of which 2.075 billion shares will be offered to institutional investors and the remaining 174.795 million shares to the public.
"What is clear however is that no new shares will be issued, implying Maxis will not receive a single sen from the IPO exercise. Instead, the proceeds will go to the shareholders looking to trim their stakes through the IPO exercise. This is perhaps not too surprising as the Indian and Indonesian operations which need the funds most are kept private for now, suggesting separate listing exercises in the future.
"However, MCB did manage to squeeze RM5 billion from Maxis via a prelisting restructuring exercise, which we believe will be used to fund the heavy capex of its foreign subsidiaries," ECM Libra Research said.
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