Axiata's target price stays at RM6.92 [New Straits Time (Malaysia)]
(New Straits Time (Malaysia) Via Acquire Media NewsEdge) PUBLIC Investment Research, the research arm of Public Investment Bank Bhd, has maintained "neutral" call on telecommunications firm Axiata Group Bhd, over the expected positive long term performance of the company.
The report noted that the bank will maintain the target price of RM6.92, on the back of Axiata's Indonesian subsidiary PT XL Axiata (XL) acquisition of PT Axis, even though XL's performance is weighted down on the weak rupiah.
"XL shareholders have approved the Axis acquisition. XL will be financing the deal with a US$500 million (RM1.66 billion) loan from its parent company, Axiata, and the remaining RM365 million from bank financing. To recap, the acquisition of Axis will enable XL to gain 15MHz on the 1,800MHz frequency to compete more effectively," said the report.
The research house expects that management for 2014 will be guided towards the low teens in revenue growth with earnings before interest, tax, depreciation and amortisation (Ebitda) margin in the mid-30s and cash out capital expenditure of seven trillion rupiah (RM1.94 million).
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