KUALA LUMPUR (Nov 2): CelcomDigi Bhd’s (KL:CDB) core earnings for the financial year ending Dec 31, 2026 (FY2026) to FY2028 are expected to take a small hit, between 1% to 4%, following an assignment to boost its network capacity and coverage, according to CIMB Securities.
This comes after CelcomDigi paid RM381.75 million on Oct 15 to strengthen its mobile network as part of a spectrum award from the Malaysian Communications and Multimedia Commission (MCMC).
The awards covered a 2x20MHz of spectrum in the 2600Mhz band for four years and 2x5MHz in the 900Mhz band for five years.
“We have cut our FY2026-FY2028 forecast core net profit estimates by 1%-4% to factor in higher spectrum amortisation. At the Ebitda (earnings before interest, taxes, depreciation and amortisation) level, our forecast is largely unchanged as we expect the additional annual fees to be offset by cost efficiencies from holding the spectrum rights,” said CIMB Securities in a note on Monday.
Nonetheless, the research house added that CelcomDigi's 3QFY2026 core net profit is expected to improve 1%-3% quarter-over-quarter to around RM430 million, driven by cost savings from its RM470 million 2026 efficiency target. Its 3QFY2026 results are expected to be released Nov 19.
Meanwhile, service revenue is likely to remain flat due to softer prepaid sales under stricter MCMC SIM registration rules, but this impact is expected to be cushioned by reduced dealer commissions and lower SIM card costs.
CIMB Securities maintained its 'buy' call and target price of RM3.65, expecting the high upfront cost to be partly offset by lower taxes and operational efficiencies.
“We have also removed our earlier assumption of a RM200 million equity injection by CelcomDigi into Digital Nasional Bhd (DNB) in FY2027, following DNB’s recent completion of its RM5.2 billion financing exercise.”