Affin Hwang Capital, in keeping a “hold” rating and RM5.60 target price on the RM38.5bil market value company, remains optimistic that DiGi will pursue revenue market share, with focus on cost efficiency to sustain profits.
“We remain confident that DiGi will go on to drive cost and network efficiency to reduce pricing pressure.
“It is our top sector pick as it continues to show the ability to grow revenue market share that should be further enhanced with the better spectrum allocation ahead,” Affin Hwang said.
DiGi was a net winner from the spectrum re-farming exercise carried out earlier this year with additional spectrum allocated in the lower 900MHz bandwidth (although lowered by 2 times 5MHz in the 1800MHz band).
“The better coverage and enhanced service quality should also help DiGi in the postpaid segment since DiGi has said that this segment has been tough to penetrate, despite it growing progressively over the past three years since the decline in prepaid segment.
“In the postpaid segment, DiGi continues to offer attractive packages and compete on price points, while in the prepaid category, it is taking steps to address the data substitution effect for the migrant segment,” said Affin Hwang, adding that in the prepaid segment, packages were targeted at driving higher prepaid Internet revenue.
http://www.thestar.com.my/business/business-news/2016/12/29/affin-hwang-sees-growth-opportunities-for-digi/