- Upgrade to BUY. We are upgrading Axiata to a BUY for the following reasons. One, the latest results suggest that declining margins that had been the major negative in previous quarters are stabilising.
- Two, challenges on the regulatory and currency fronts are well known by the market and already factored into the share price.
- Three, free cashflow is improving rapidly, and this could lead to higher dividends from FY13 onward. Axiata has already doubled its interim dividends this time round. Our EV-derived TP is MYR6.70 (MYR5.30 previously).
Source: Maybank Research - 3 Sept 2012
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