KUALA LUMPUR (April 2): Average revenue per user (ARPU) pressures could limit Maxis Bhd’s (KL:MAXIS) upside this year, despite dividend yield remaining compelling among peers, according to Phillip Capital.
The research house noted that ARPU pressures reflect continued migration from prepaid to postpaid and growing preference for more affordable entry-level postpaid plans.
“While prepaid ARPU held relatively steady at RM26-27, postpaid ARPU softened to RM63-64 following the introduction of entry-level 5G postpaid plans from RM79/month in 2H2023 (second half of 2023). As such, we believe ARPU expansion is likely remain constrained.
“We expect Maxis to deliver flattish quarter-on-quarter core net profit of RM390-395 million (for 1QFY2026), supported by steady mobile subscription growth and continued traction in the home fibre segment, which should offset the ongoing ARPU headwinds,” it said in a research note on Thursday.
Looking ahead, Phillip Capital expects collaboration between Maxis, CelcomDigi Bhd (KL:CDB) and YTL Power International Bhd (KL:YTLPOWR) to unlock efficiencies in site sharing, procurement and roll-out execution, potentially easing capex burdens and accelerating 5G deployment across Malaysia following the completion of the put option exercise with the Ministry of Finance in March.
Additionally, Maxis has guided for low single-digit growth in service revenue and earnings before interest, taxes, depreciation, and amortisation (Ebitda) this year, with capex intensity contained at 10%-12%.
Roughly 30% of spending will be channelled into fibre roll-out and 40% into network expansion, including connectivity for data centres and the East Coast Rail Link Corridor.
There are now eight ‘buy’, 14 ‘hold’ and one ‘sell’ calls on the stock. The average target price is RM4.14 across 23 research houses, according to Bloomberg.
Phillip Capital maintains its ‘hold’ rating with a target price of RM3.64, noting that while Maxis’ dividend profile remains resilient, near-term investor sentiment may stay cautious amid lingering 5G monetisation uncertainties and intensifying competition.
At noon break, Maxis settled at RM3.51, valuing the group at RM27.5 billion.