Axiata Group Bhd
(Oct 28, RM5.03)
Maintain buy call with an unchanged target price of RM6.45: Axiata Group Bhd’s wholly-owned Celcom Axiata upgraded its Celcom FIRST post-paid plans to offer Internet quota up to 60GB to its customers. 

Celcom’s FIRST Gold and FIRST Platinum packages will be enhanced with higher Internet allocation without any additional cost. 

Celcom’s FIRST Gold Internet quota has doubled to 20GB for RM80 per month, matching Digi’s RM80 plan currently. This includes 10GB data plus another 10GB of weekend data plus free unlimited Yonder music. As a comparison, U Mobile’s RM70 plan offers 15GB plus 7GB of VideoOnz streaming. Maxis’ cheapest post-paid plan with unlimited calls is priced at RM98 per month with only 5GB of data. 

Celcom’s FIRST Platinum plan, which costs RM150 per month, has raised its quota by 3.3 times to 60GB (30GB weekday and 30GB weekend) from an earlier 18GB (9GB weekday and 9GB weekend).  

In addition, Celcom announced a new post-paid plan called FIRST Gold Plus with 40GB (20GB weekday and 20GB weekend) at a highly attractive RM98 per month. Digi offers the same quota of 40GB but at a slightly higher monthly higher price of RM110. Alternatively, U Mobile offers only 30GB at RM98 per month. 

The new Celcom FIRST plans started to be made available for new sign-ups last Friday. Existing Celcom FIRST Gold and FIRST Platinum customers, including Celcom FIRST Gold business and FIRST Platinum business customers, will automatically enjoy the new Internet allocation effective from tomorrow without any additional charges. 

Celcom also announced a new add-on feature called AnydayGB at RM10 per month (automatically renewed) allowing FIRST Gold, FIRST Gold Plus and FIRST Platinum customers to combine their weekday and weekend Internet allocations, to be used any day and at any time. 

Notwithstanding the intense domestic cellular competition, we continue to like Axiata due to the expected earnings accretion from its Nepal-based Ncell and strategic domestic roaming arrangement with Telekom, which will provide customers with a more comprehensive range of services. 

Additionally, Axiata currently trades at a bargain financial year ending 2017 forecast enterprise value divided by earnings before interest, taxes, depreciation and amortisation of 6 times, below its two year average of 8.6 times. As a comparison, both Maxis and Digi are trading at 13 times. Additionally, dividend yields are attractive at 4%. — AmInvestment Research, Oct 28