KUALA LUMPUR (Oct 30): AmInvestment Bank maintained a “hold” on Maxis with an unchanged discounted cash flow (DCF)-derived fair value of RM3.90 per share.

This follows the house stance to maintain its financial year 2023-2026 forecast (FY23F-26), which accounted for the minimal impact of price cuts in the home fibre segment, as the reduction in home fibre’s average revenue per unit (Arpu) will be cushioned by lower network costs.

In a research note on Monday, AmInvestment mentioned that Maxis has announced a price reduction of 13%–32% in its home fibre plans, post-finalisation of the access agreement with Telekom Malaysia (TM), which is based on the new Mandatory Standard on Access Pricing (MSAP).

“Maxis’ most subscribed monthly plan at RM99 for 100Mbps is now on par with the new pricing of CelcomDigi and Unifi.

"However, at speeds of 300Mbps and above, Maxis’ monthly prices are now more competitive, cheaper by RM10 for 300Mbps and 500Mbps, it said.

In addition, it noted that Maxis has introduced standalone fibre plans at 1Gbps for RM249 and 2Gbps for RM319 to capture data-intensive consumers. While Maxis’ 2Gbps price is similar to Unifi’s, the 1Gbps plan is substantially lower by RM40 (-14%) than both Unifi and CelcomDigi’s options.

The research firm also noted that Maxis is providing free speed upgrades for existing customers subscribing to plans at 100Mbps and above.

As a result, AmInvestment Bank reckons that the home fibre price reduction by Maxis and the offering of more tier-pricing options for customers would help them maintain competitiveness against their peers.

However, the stock is currently trading at 10 times for the enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/Ebitda), slightly below its five-year average of 12 times, which reflects limited earnings upside due to the inflationary environment impacting consumer affordability.

As at 12.21pm, Maxis is trading at RM3.93 per share with a market capitalisation of RM30.86 billion.