Regional Telco: Plugging The Data Gusher, Part 1

RegionalTelecommunications|23September2011
RegionalTelco
SectorUpdate
Pluggingthedatagusher,Part1
Analyst
GregoryYAP
gyap@kimeng.com
(65)64321450
TelcoBUYlist
SingTel(STSP)
Recommendation
Price
Target
StarHub(STHSP)
Recommendation
Price
Target
M1(M1SP)
Recommendation
Price
Target
TM(TMK)
Recommendation
Price
Target
BUY
S$3.02
S$3.40
BUY
S$2.87
S$3.27
BUY
S$2.48
S$2.76
BUY
RM4.08
RM4.60
WhatsNew
Telcos worldwide are phasing out unlimited data offerings from their
mobile broadband plans as they seek to monetise their investments in
datanetworksamiddecliningtraditionalrevenuesourcessuchasvoice
and SMS. There are two ways to counter this unsustainable trend
either cut costs or increase revenue. Malaysian telcos, in particular
AxiataandDiGi,havebeenaggressiveoncostcutting.InSingapore,we
believemoredifferentiatedpricingmoveswillbeforthcomingafterM1s
bidtodismantleunlimiteddatabundlingforitsmobilebroadbandplans.
OurtopBUYcallsareonStarHubandSingTelinSingapore,andTelekom
Malaysia(TM)inMalaysia.
OurView
M1 recently introduced four new mobile data plans that did not come
with unlimited data bundles. Instead, its new 7.2Mbps and 21Mbps
plansaretieredtodatabundlesof550GB.OnlyStarHubisstilloffering
thisperkbutwiththetrendoftelcosworldwidephasingoutallyoucan
eat data bundles, we believe it will only be a matter of time before it
removesthatfromthemarketaswell.
At the heart of this move is the trend of exploding data traffic that is
threatening the telcos traditional revenue sources such as voice and
SMS. However, despite significant investments in hardware, the telcos
arenotrealisingthereturnoninvestmenttheywantontheirnetworks.
The increase in nonvoice contributions has not been accompanied by
higherARPU.
Thistrendisclearlyunsustainable.Tocounterthis,weexpectthetelcos
toeithercuttheiroperatingcostsorintroducedifferentiatedpricingthat
will better help them monetise their networks. On the former, the
Malaysian telcos are welladvanced in their initiatives, such as the
CelcomDiGinetworksharingcollaboration.InSingapore,weexpectthe
telcostointroducemoredifferentiatedpricingplans.
Action&Recommendation
Our bets are still squarely on the telcos to continue outperforming in the
currentvolatiletimes.InSingapore,wehaveaBUYrecommendationonall
three telcos although our preference is for StarHub (FY11 yield: 7%) and
SingTel(FYMar12yield:5.7%)giventherecentoutperformanceofM1(FY11
yield:6.8%).InMalaysia,wehaveaBUYcallonTMforitsgrowingstrength
infixedbroadbandandattractiveyieldof6.4%.
SEEAPPENDIXIFORIMPORTANTDISCLOSURESANDANALYSTCERTIFICATIONS
Co.RegNo:198700034E
MICA(P):090/11/2009
RegionalTelecommunications
23September2011
NomoreunlimiteddatafixfromM1
Earlierthismonth,M1introducedfournewmobilebroadbandplansthatdidnot
comewithunlimiteddatabundles.Instead,itsnew7.2Mbpsand21Mbpsplans
are tiered to data bundles ranging from 5GB to 50GB. While the old 7.2Mbps
planissimilarinpricetothecurrentmDataMaxplan,ithadanunlimiteddata
bundlecomparedtoonly50GBcurrently.
With M1 scrapping the unlimited data bundles for its mobile broadband plans,
StarHubistheonlyonestillofferingthisperk.However,withthetrendoftelcos
worldwidephasingoutallyoucaneatdatabundles,webelieveitwillonlybea
matter of time before it removes that from the market as well. SingTel has
alwayshadtheleastgenerousdatabundlesforitsmobilebroadbandplans.
Figure1:M1mobiledataplans
Current*
Monthlysubscription($)
Downloadspeed(Mbps)
Uploadspeed(uptoMbps)
Databundle(GB)
Previous
Monthlysubscription($)
Downloadspeed(Mbps)
Uploadspeed(Mbps)
Databundle
Value
12
7.2
2
5
1Mbps
15.69
1
0.5
Unlimited
Lite
24
7.2
2
12
2Mbps
27.10
2
0.5
Unlimited
Max
40
7.2
2
50
4Mbps
35.95
4
1
Unlimited
StudentLite
15
7.2
2
10
7.2Mbps
41.58
7.2
2
Unlimited
Extreme
59
21
5.76
50
21Mbps
59.40
21
5.76
Unlimited
*Includeschoiceofmobileaccessdevice.
Source:Company
Stillgenerous
However, even the limited data allowances from M1 and SingTel can still be
considered generous. SingTel, for example, offers 50GB for its dongle plans, 2
30GBforitssmartphoneplansand1230GBforitsiPhoneplans.Giventhatthe
averagesmartphoneuserinSingaporehasbeenreportedtoconsumeonlyabout
1GB of data per month or less, the plans can effectively be considered as
unlimited.Elsewhereintheregion,dataplansfromMalaysiantelcos(seeFig2),
forexample,donotevenapproachtheSingaporetelcosintermsofgenerosity
buttherehasbeennonoticeableimpactontheirdataARPU.
23September2011
Figure2:BroadbandplansinMalaysia
DiGi
Device
Typeofplan
Monthlysubscription(RM)
Databundles
SmartPlan
Smartphone
Voice/Data
4383
15GB
InternetLite
Smartphone
Data
33
300MB
InternetUnlimited
Smartphone
Data
68
3GB
iPad
Tablet
Data
3088
500MB6GB
Discover/Explore
Dongle
Data
33103
3GB10GB
iPad
Tablet
Data
70200
3.515GB
MobileInternet*
Smartphone
Data
1888
100MB3GB
Maxis
Device
Typeofplan
Databundles
WirelessBroadband
Dongle
Data
48198
1.512GB
*Timebasedandmonthlypasses.
Celcom
Device
Typeofplan
Databundles
WirelessBroadband
Dongle
Data
48138
1.510GB
MobileInternet
Smartphone
Data
2888
0.35GB
Source:Companies
WhyisM1doingthis?
We believe the main issue here is exploding data usage as webconnected
devicessuchassmartphonesandtabletsbecomeevermorepopular.Datafrom
StarHub (the only telco to regularly publish this statistic) shows that its mobile
data traffic has doubled since two years ago. Given M1s traditionally lower
pricedofferings,wewouldnotbesurprisedifitsowndatatraffichassurgedeven
moredramaticallyoverthesameperiod.
However,therehasbeennocorrespondingincreasein dataARPU,whilein the

mediumtolongterm,thetelcostraditionalvoiceandSMSrevenuewouldlikely
comeunderpressurefromVOIPapplications,suchasViberandSkype,aswellas
crossplatformmobilemessageapps,suchasWhatsAppMessenger.Inshort,the
telcos must find ways to monetise the surge in data traffic or risk seeing their
traditionalrevenuesourcesundermined.
Figure3:StarHubmobiledatatrafficexploding
4000000
3500000
3000000
GB
2500000
2000000
1500000
1000000
500000
Source:Company
1
0
Ja
n
11
M
ar
1
1
M
ay
1
1
No
v
p
10
Se
Ju
l1
0
9
Ja
n
10
M
ar
1
0
M
ay
1
0
No
v
p
09
Se
Ju
l0
M
ar
0
9
M
ay
0
9
23September2011
Figure4:Nonvoicerevenuerisingsteadily
45%
45%
40%
40%
35%
35%
30%
30%
25%
25%
20%
15%
M
ar
0
9
M
ay
0
9
Ju
l 0
9
Se
p
09
No
v
09
Ja
n
10
M
ar
1
M 0
ay
1
0
Ju
l 1
0
Se
p
10
No
v
10
Ja
n
11
M
ar
1
1
M
ay
1
1
M
ar
0
M 9
ay
0
9
Ju
l 0
9
Se
p
09
No
v
09
Ja
n
10
M
ar
1
0
M
ay
1
0
Ju
l 1
0
Se
p
10
No
v
10
Ja
n
11
M
ar
1
1
M
ay
1
1
20%
SingTel(inclSMS)
Starhub(postpaid)
M1(as%ofsvsrevenue)
Digi
Celcom
Maxis
Source:Companies
Figure5:ButimpactonARPUhasbeennexttononexistent
115.00
23.00
105.00
RM/month
22.50
22.00
21.50
95.00
85.00
75.00
65.00
21.00
55.00
M
ar
0
M 9
ay
0
9
Ju
l 0
9
Se
p
0
No 9
v
09
Ja
n
1
M 0
ar
1
M 0
ay
1
0
Ju
l 1
Se 0
p
1
No 0
v
1
Ja 0
n
11
M
ar
1
M 1
ay
1
1
20.50
M1
Celcom
Maxis
Source:Companies
Unsustainabletrend
Thistrendisclearlyunsustainable.AtthesametimethatARPUisnotbenefiting
from the surge in data traffic, the telcos have been forced to do more for less.
Increased demands on the network have necessitated the upgrading of their
access,coreandbackhaulnetworkstohandletheloads.Telcoseverywhereare
also being compelled to upgrade to LTE (Long Term Evolution) or WiMAX to
improve access and build their own backhaul. But while they have had to
increasetheircapex,thereisnocorrespondinglyhigherreturnoninvestmentfor
thenewhardware.
Sofar,telcoshavebeentacklingthisissueindifferentways.InSingapore,rather
than directly tax the user and risk losing market share, the telcos have been
contenttoupgradeARPUthroughqualityofserviceandspeedtomarketvianew
technology.Thisispossiblebecausemobiledatanetworksherearestillrelatively
fast and more advanced than elsewhere in the region, while the main bulk of
upgradestothefixednetworkinfrastructureisbeingpaidforbythegovernment.
InMalaysia,thestoryisdifferent.Usagebasedpricinginthecountryisinmany
ways more advanced than in Singapore. DiGi, for instance, has two 3G mobile
device broadband plans, Discover Day and Discover, where the day plan (7am
23September2011
7pm)ishalfthepriceofthealldayplan.Thisway,ittriestoevenoutthetraffic
loadonitsnetworkthroughoutthedayinsteadofsufferingthroughanavalanche
ofusersduringpeakperiods.
Inaddition,DiGihasbeenworkingwithCelcomonmonetisingtheirnetworksby
sharing base station sites, microwave links and trunk fibre transmission. Both
companiesexpecttocutoperatingexpensesbyayearlyaverageofRM150250m
after2015althoughincrementalsavingsshouldstarttomaterialiseby2012.The
initial collaboration will cover 218 sites from each operator, while subsequent
phaseswillinvolvetheconsolidationandupgradingofmorethan4,000sitesby
2015.Also,CelcomhasbeensellingwholesaleaccesstoMVNOs(mobilevirtual
networkoperators)suchasTuneTalk,XOXBhd,MerchantradeandRedtone,and
inthefuture,perhapsevenitsownparentcompanyTM,tomonetiseitsexcess
capacity.
Morepricedifferentiationexpected
As the telcos seek to monetise their data networks, we believe they will likely
introduce additional tiers into their pricing for data plans that differentiate
beyonddatacapsandgointotheareasofspeedandquality.SingTelhasalready
started down this road. In June this year, it launched the Priority Pass mobile
broadbandservice,whereuserswithdeeperpocketsandtheneedpaymorefor
fasterspeedsandbetterqualityofservice.
Figure6:SingTelsmobiledevicedataplans
Regularsubscription($)
Typicaldownloadspeed(Mbps)
Databundle(GB)
Classic3.6
29.9
0.82.1
50
Priority7.2
40.0
1.43.7
50
Premium21
59.9
1.74.8
50
Source:Company
However,wethinktelcosmaydomorethanthisinthelongterm.Asdatatraffic
rampsupandtraditionalrevenuesourcesdecline,weseethefollowingmeasures
beingintroduced:
Ratesthatdifferentiatebetweenpeakandnonpeakhours.
A fair usage policy, targeted at heavy users who use peertopeer software
suchasBitTorrent,eDonkeyandGnutella,orfilesharingapplicationssuchas
Limewire.
Separate rates for users who want to use dataheavy overthetop (OTT)
applications such as VOIP apps (eg, Skype, Viber) and video and content
players(eg,YouTube).
Prioritisation of enduser services that generate revenue for the telco, such
asmobilepaymentservicesfordemographicsthatneedthem,eg,theyouth
marketwithnoaccesstocreditcardsorbanks.
Action&Recommendation
In Singapore, we have BUY calls on all three telcos on the basis of the relative
defensiveness of earnings and dividends within the sector. Although valuations
forM1andStarHubarenotcheap,theirdividendpayoutshouldbesustainable,
thuslimitingdownsideandpresentinganargumentforstockpriceupsideamid
23September2011
thecurrentmoodofriskaversion.OurpreferenceisforStarHub(FY11yield:7%)
andSingTel(FYMar12yield:5.7%)giventherecentoutperformanceofM1(FY11
yield:6.8%).
In Malaysia, our BUY call on TM is premised on its growing strength in fixed

broadband, with Unifi subscriber additions likely to accelerate in the next few
quarters.ApositivedevelopmentistheopeningupofitsHighSpeedBroadband
Services(HSBB)networktomobileoperatorssuchasMaxisandCelcomwhoare
looking to complement their mobile with fixedline offerings. In a mutually
beneficial move to broaden product offerings, the proposed MOU with Celcom
willalsoinvolvethelattergrantingTMitsMVNOservices.
Figure7:Ourtelcouniverse
Stock
SingTel
StarHub
M1
TM
AxiataGroup
Maxis
DiGi.com
Ticker
STSP
STHSP
M1SP
TMK
AXIATAMK
MAXISMK
DIGIMK
Marketcap
(US$m)
37,309
3,818
1,743
4,622
12,413
12,595
7,429
Source:KimEng,Maybankestimates,Bloomberg
Rec
BUY
BUY
BUY
BUY
HOLD
HOLD
HOLD
Closingprice Targetprice
(localccy)
(localccy)
3.02
3.40
2.87
3.27
2.48
2.76
4.08
4.60
4.63
5.10
5.29
5.50
30.10
30.30
PER(x)
Current Forecast
12.4
11.8
16.3
14.8
13.5
12.6
24.9
22.8
14.9
13.4
16.8
16.1
23.5
22.2
Dividend
yield(%)
5.6
7.0
6.7
6.4
2.4
7.6
5.4
23September2011
SingTel(STSP)
Profitandloss
YEMar30(S$'m)
Sales
Costofgoodssold
Grossprofit
Otherincome
Operatingexpenses
EBIT
Netinterestincome(exp)
Shareofassociates(pretax)
Netexceptional
Pretaxincome
Incometaxes
Minorityinterest
Netincome
EPS(cts)
EBITDA
Cashflow
2010
2011 2012F
2013F
2014F
16,871.0 18,071.0 18,613.1 19,171.5 19,746.7
0.0
0.0
0.0
0.0
0.0
16,871.0 18,071.0 18,613.1 19,171.5 19,746.7
95.0
130.0
130.0
130.0
130.0
13,997.015,051.015,337.2 15,797.3 16,271.3
2,969.0 3,150.0 3,405.9 3,504.2 3,605.4
334.0 324.0 350.0
350.0
350.0
2,410.0 2,141.0 2,112.9 2,150.0 2,216.9
2.0
25.0
0.0
0.0
0.0
5,043.0 4,992.0 5,168.8 5,304.2 5,472.3
1136.0 1170.0 1292.2 1220.0 1258.6
1.0
3.0
0.0
0.0
0.0
3,907.0 3,825.0 3,876.6 4,084.2 4,213.7
24.5
24.0
24.3
25.6
26.5
4,847.0 5,119.0 5,453.4 5,613.1 5,777.5
Source:Companydata,KimEngestimates
2010
37,951.5
5,144.3
1,613.6
0.0
3,172.1
345.8
12.8
32,807.2
10,667.3
10,750.2
1,189.5
10,200.2
14,435.5
6,834.8
5,006.6
1,528.0
300.2
7,600.7
5,351.1
2,249.6
23,516.0
2,616.3
20,876.5
0.0
23.2
2011
39,282.3
6,555.2
2,738.0
0.0
3,449.3
299.3
68.6
32,727.1
10,506.0
11,112.5
890.3
10,218.3
14,932.0
8,540.8
4,842.1
2,698.9
999.8
6,391.2
4,586.7
1,804.5
24,350.3
2,622.8
21,705.5
0.0
22.0
2012F
40,468.6
7,520.0
3,425.1
0.0
3,722.6
372.3
0.0
32,948.6
10,500.0
11,298.6
950.0
10,200.0
14,925.1
8,331.0
4,781.0
2,550.0
1,000.0
6,594.1
4,594.1
2,000.0
25,543.5
2,650.0
22,868.5
0.0
25.0
2013F
41,821.3
8,680.9
4,463.2
0.0
3,834.3
383.4
0.0
33,140.3
10,500.0
11,490.3
950.0
10,200.0
15,053.6
8,459.5
4,909.5
2,550.0
1,000.0
6,594.1
4,594.1
2,000.0
26,768.8
2,650.0
24,093.8
0.0
25.0
2014F
43,217.7
9,879.9
5,535.6
0.0
3,949.3
394.9
0.0
33,337.8
10,500.0
11,687.8
950.0
10,200.0
15,185.8
8,591.7
5,041.7
2,550.0
1,000.0
6,594.1
4,594.1
2,000.0
28,032.9
2,650.0
25,357.9
0.0
25.0
2012F
6,114.7
5,168.8
2,047.4
338.8
762.8
2,269.0
2,233.6
6.0
41.4
3,158.6
27.2
2,713.6
141.5
330.7
687.1
3,881.1
2013F
6,618.7
5,304.2
2,108.9
5.6
799.9
2,300.6
2,300.6
0.0
0.0
3,280.0
0.0
2,859.0
0.0
421.1
1,038.1
4,318.2
2014F
6,783.4
5,472.3
2,172.1
5.8
866.8
2,369.6
2,369.6
0.0
0.0
3,341.5
0.0
2,949.6
0.0
391.9
1,072.3
4,413.8
2011
7.1
6.1
5.6
2.1
2.1
28.3
17.4
21.2
9.7
15.7
29.9
18.7
118.9
9.7
1.0
18.7
2.0
0.8
0.7
4,548
24.0
25.4
152.7
113.5
32.1
25.8
2012F
2013F
2014F
3.0
8.1
6.5
1.3
1.4
3.0
2.9
2.9
5.4
5.4
3.0
2.9
2.9
3.2
3.2
29.3
18.3
20.8
9.6
15.2
29.3
18.3
21.3
9.8
15.3
29.3
18.3
21.3
9.7
15.0
28.0
14.6
95.9
9.7
1.2
17.5
2.1
0.9
0.9
3,719
26.7
10.0
65.6
10.0
1.2
18.9
2.3
1.0
1.0
2,681
25.5
5.7
38.2
10.3
1.2
19.4
2.3
1.1
1.1
1,609
24.3
24.4
160.1
116.9
34.2
17.0
25.6
27.1
167.8
120.4
35.2
17.9
26.5
27.7
175.8
124.0
36.3
18.5
Keyratios
YEMar30
Growth(%YoY)
Sales
OP
EBITDA
NP
EPS
Profitability(%)
EBITDAmargin
EBITmargin
Netmargin
ROA
ROE
Stability
Grossdebt(cash)/equity(%)
Netdebt(cash)/equity(%)
Netdebt(cash)/EBITDA(%)
Int.coverage(X)
Int.&STdebtcoverage(X)
Cashflowint.coverage(X)
Cashflowint.&STdebt(X)
Currentratio(X)
Quickratio(X)
Netdebt(cash)($'m)
Persharedata(cts)
EPS
FreeCFPS
BVPS
SPS
EBITDA/share
DPS
2010
13.0
10.1
9.4
13.3
13.3
28.7
17.6
23.2
10.3
16.6
29.3
22.4
134.8
8.9
1.6
16.0
2.9
0.8
0.7
5,266
24.5
21.4
147.5
106.0
30.4
14.2
2011
6,043.0
4,992.0
1,969.0
15.4
933.4
2,759.1
2,004.6
669.6
84.9
2,159.5
6.5
2,356.6
839.9
649.3
1,124.4
4,038.4
2010
5,328.8
5,043.0
1,878.0
135.9
1,456.3
2,179.2
1,923.0
90.2
166.0
2,612.0
10.7
2,084.0
204.4
334.3
537.6
3,405.8
Balancesheet
YEMar30(S$'m)
Totalassets
Currentassets
Cash
STinvestments
Trade&otherreceivables
Inventory
Others
Otherassets
LTinvestments
Netfixedassets
Others
Intangible
Totalliabilities
Currentliabilities
Trade&otherpayables
STdebt
Others
Longtermliabilities
LTdebt
Others
Totalequity
Paidincapital
Reserve
Others
Minorityinterest
YEMar30(S$'m)
Operatingcashflow
Pretaxincome
Depreciation&amortisation
Changeinworkingcapital
Others
Investmentcashflow
Netcapex
ChangeinLTinvestment
Changeinotherassets
Financingcashflow
Changeinsharecapital
Dividendspaid
Netchangeindebt
ChangeinotherLTliab.
Netcashflow
Freecashflow
23September2011
StarHub(STHSP)
Profitandloss
YEDec31(S$m)
Sales
Servicerevenue
Costofgoodssold
Grossprofit
Otherincome
Operatingexpenses
Operatingprofit
Shareofassociates
Netexceptional
Pretaxincome
Incometaxes
Minorityinterest
Netincome
EPS(cts)
EBITDA
Cashflow
2009
2010 2011F
2150.1 2237.7 2286.4
2057.5 2144.4 2188.5
0.0
0.0
0.0
2150.1 2237.7 2286.4
0.0
6.0
0.0
1741.8 1901.4 1897.7
408.3
342.3
388.7
23.3
24.8
24.0
0.0
0.0
0.0
0.0
0.0
0.0
385.0
317.5
364.7
65.5
54.3
62.0
0.0
0.0
0.0
319.5
263.2
302.7
18.7
15.3
17.6
653.4
601.8
674.5
2012F
2430.5
2327.7
0.0
2430.5
0.0
2005.2
425.3
24.0
0.0
0.0
401.3
68.2
0.0
333.1
19.4
729.2
2013F
2584.9
2476.8
0.0
2584.9
0.0
2132.5
452.3
24.0
0.0
0.0
428.3
72.8
1.0
354.5
20.7
775.5
YEDec31(S$m)
Operatingcashflow
Pretaxincome
Others
Investmentcashflow
Netcapex
Changeinotherassets
Financingcashflow
Netchangeindebt
Netdividends
Netcashflow
Freecashflow
2009
692.4
385.0
245.1
32.6
29.7
229.9
231.4
1.5
356.6
2.4
17.9
316.7
24.4
105.9
461.0
Balancesheet
YEDec31(S$m)
Totalassets
Currentassets
Cash
STinvestments
Inventory
Others
Otherassets
LTinvestments
Netfixedassets
Others
Intangible
Totalliabilities
Currentliabilities
Trade&otherpayables
STdebt
Others
Longtermliabilities
LTdebt
Others
Totalequity
Paidincapital
Reserve
Others
Minorityinterest
2010
1793.5
561.4
237.5
0.0
275.6
31.8
16.5
1232.1
0.0
776.0
4.5
451.6
1739.5
1073.1
675.1
330.4
67.6
666.4
513.2
153.2
54.0
260.3
0.0
206.3
0.0
2011F
1749.2
519.5
195.8
0.0
274.4
34.3
15.0
1229.7
0.0
774.7
5.0
450.0
1735.9
1110.9
685.9
350.0
75.0
625.0
475.0
150.0
13.2
260.0
0.0
246.8
0.0
2012F
1782.3
553.8
210.7
0.0
291.7
36.5
15.0
1228.5
0.0
773.5
5.0
450.0
1779.2
1154.2
729.2
350.0
75.0
625.0
475.0
150.0
3.1
260.0
0.0
256.9
0.0
2013F
1840.9
613.6
249.6
0.0
310.2
38.8
15.0
1227.4
0.0
772.4
5.0
450.0
1825.5
1200.5
775.5
350.0
75.0
625.0
475.0
150.0
15.5
261.0
0.0
245.5
0.0
YEDec31
Growth(%YoY)
Sales
OP
EBITDA
NP
EPS
Profitability(%)
Grossmargin
Operatingmargin
EBITDAmargin(onservicerev)
Netprofitmargin
ROA
ROE
Stability
Grossdebt(cash)/equity(%)
Netdebt/EBITDA(%)
Int.coverage(X)
Currentratio(X)
Quickratio(X)
Netdebt(cash)($'m)
Persharedata(cts)
EPS
FreeCFPS
BVPS
SPS
EBITDA/share
DPS
2009
2010
1.1
0.3
1.4
2.6
2.1
2012F
752.9
401.3
303.8
23.8
24.0
302.6
302.6
0.0
0.0
435.5
0.0
0.0
343.2
92.3
14.9
450.3
2013F
800.9
428.3
323.1
25.5
24.0
322.0
322.0
0.0
0.0
440.0
1.0
0.0
343.2
97.8
38.9
478.9
n/a
17.5
31.3
13.7
19.6
3815.5
26413.7
19667.8
84.2
17.0
1.1
30.1
2.0
0.5
0.4
614.3
17.6
23.8
0.8
133.3
39.3
20.0
6.3
6.3
6.3
6.4
6.4
n/a
17.5
31.3
13.7
18.9
4081.4
6249.9
4766.6
93.3
15.5
1.0
27.7
1.8
0.5
0.4
629.2
15.3
23.2
3.1
130.5
35.1
20.0
2013F
6.3
9.4
8.1
10.1
10.1
n/a
17.0
30.8
13.2
17.1
900.9
1562.2
1122.4
100.7
12.9
1.0
25.2
1.9
0.5
0.5
606.1
18.7
26.9
7.3
125.6
38.2
19.0
2012F
2.2
13.6
12.1
15.0
15.0
n/a
15.3
28.1
11.8
14.9
292.8
718.5
532.4
102.5
16.9
1.3
28.7
2.2
0.6
0.5
669.7
2011F
4.1
16.2
7.9
17.6
17.8
n/a
19.0
31.8
14.9
18.8
273.3
2011F
693.0
364.7
285.8
18.5
24.0
283.4
284.5
0.0
1.1
451.3
0.3
18.6
343.2
89.2
41.7
408.5
Keyratios
2009
1732.6
526.5
234.2
0.0
241.5
28.2
22.6
1206.1
0.0
785.1
5.3
415.7
1606.8
925.5
573.5
290.4
61.6
681.3
613.5
67.8
125.8
257.5
0.0
131.7
0.0
2010
669.6
317.5
259.5
63.5
29.1
268.2
272.1
3.9
398.1
2.2
90.4
343.1
33.2
3.3
397.5
5336.3
3721.8
74.2
18.1
1.2
32.0
2.1
0.5
0.5
575.4
19.4
26.3
0.2
141.7
42.5
20.0
20.7
27.9
0.9
150.7
45.2
20.0
23September2011
M1(M1SP)
Profitandloss
YEDec31(S$m)
Sales
Costofgoodssold
Grossprofit
Otherincome
Operatingexpenses
Operatingprofit
Shareofassociates
Netexceptional
Pretaxincome
Incometaxes
Minorityinterest
Netincome
EPS(cts)
EBITDA
Cashflow
2009
781.6
326.8
454.8
1.9
275.2
181.5
6.5
0.0
0.0
175.0
24.8
0.0
150.2
16.8
309.6
2010 2011F
979.1 1,049.3
492.2 527.7
486.9
521.7
2.3
2.0
293.0 315.8
196.2
207.8
5.8
6.0
0.0
0.0
0.0
0.0
190.4
201.8
33.4
35.3
0.0
0.0
157.0
166.5
17.5
18.4
313.2
318.0
2012F
1,060.8
514.7
546.1
2.0
325.7
222.4
6.0
0.0
0.0
216.4
37.9
0.0
178.5
19.7
339.1
2013F
1,106.0
523.6
582.4
2.0
342.9
241.6
6.0
0.0
0.0
235.6
41.2
0.0
194.3
21.5
363.2
2009
837.5
140.7
7.4
0.0
107.8
25.4
0.1
696.8
0.0
684.3
0.8
11.7
581.4
493.7
223.0
269.0
1.7
87.7
0.0
87.7
256.1
116.5
133.4
6.2
0.0
2010
934.4
233.7
8.8
0.0
201.0
23.4
0.5
700.7
0.0
687.1
0.9
12.7
631.6
300.0
233.0
66.0
1.0
331.6
250.0
81.6
302.9
127.6
169.3
6.0
0.0
2011F
981.0
264.3
22.5
0.0
209.9
31.5
0.5
716.6
0.0
702.9
1.0
12.7
652.3
328.9
238.9
90.0
0.0
323.4
250.0
73.4
328.6
136.7
185.9
6.0
0.0
2012F
991.4
300.5
34.8
0.0
233.4
31.8
0.5
690.9
0.0
677.2
1.0
12.7
627.0
310.9
240.9
70.0
0.0
316.1
250.0
66.1
364.4
136.7
221.7
6.0
0.0
2013F
1,011.8
305.8
27.8
0.0
243.3
33.2
1.5
706.0
0.0
692.3
1.0
12.7
608.6
299.1
249.1
50.0
0.0
309.5
250.0
59.5
403.2
136.7
260.5
6.0
0.0
2011F
239.5
201.8
110.2
12.1
60.4
121.8
121.7
0.0
0.1
104.0
9.1
24.0
149.8
12.7
13.7
117.8
2012F
250.9
216.4
116.7
21.8
60.4
100.0
100.0
0.0
0.0
138.6
0.0
20.0
142.8
24.3
12.3
150.9
2013F
292.7
235.6
121.7
4.2
60.4
145.0
145.0
0.0
0.0
154.7
0.0
20.0
155.5
20.8
7.0
147.7
Keyratios
YEDec31
Growth(%YoY)
Sales
OP
EBITDA
NP
EPS
Profitability(%)
Grossmargin
ServiceEBITDAmargin
Operatingmargin
Netprofitmargin
ROA
ROE
Stability
Netdebt(cash)/EBITDA(%)
Int.coverage(X)
Currentratio(X)
Quickratio(X)
Netdebt(cash)($'m)
Persharedata(cts)
EPS
CFPS
BVPS
SPS
EBITDA/share
DPS
2009
2010
2.4
5.8
2.2
0.1
0.0
52.7
42.9
21.8
17.6
19.4
50.6
84.1
78.3
37.1
2.9
41.8
3.3
1.0
0.9
285.2
18.4
26.5
36.3
115.9
35.1
16.6
4.3
8.6
7.1
8.8
8.8
51.5
42.3
21.0
16.8
18.1
51.5
99.8
96.6
34.6
2.2
39.9
2.5
0.8
0.7
317.5
17.5
20.9
33.7
109.0
34.9
17.5
2013F
1.1
7.0
6.6
7.2
7.2
49.7
41.3
19.8
15.9
17.4
52.7
98.1
101.4
33.8
2.7
32.3
2.6
0.8
0.7
307.2
16.8
24.8
28.6
87.3
34.6
13.4
2012F
7.2
5.9
1.5
6.0
5.2
49.7
42.7
20.0
16.0
17.7
56.2
84.5
102.1
27.9
0.7
34.1
0.8
0.3
0.2
261.6
2011F
25.3
8.1
1.2
4.5
4.2
58.2
44.2
23.2
19.2
18.3
62.7
2010
187.4
190.4
117.0
83.6
36.4
120.4
99.9
21.0
0.5
65.7
8.5
47.0
121.2
0.0
1.3
87.5
2009
221.9
175.0
128.1
41.0
40.2
131.7
119.0
13.3
0.6
100.6
0.3
19.0
119.9
0.0
10.4
102.9
Balancesheet
YEDec31(S$m)
Totalassets
Currentassets
Cash
STinvestments
Inventory
Others
Otherassets
LTinvestments
Netfixedassets
Others
Intangible
Totalliabilities
Currentliabilities
Trade&otherpayables
STdebt
Others
Longtermliabilities
LTdebt
Others
Totalequity
Paidincapital
Reserve
Others
Minorityinterest
YEDec31(S$m)
Operatingcashflow
Pretaxincome
Others
Investmentcashflow
Netcapex
Changeinotherassets
Financingcashflow
Netchangeindebt
Netdividends
Netcashflow
Freecashflow
74.9
67.5
40.3
4.3
48.8
5.2
1.0
0.9
272.2
19.7
27.7
40.3
117.2
37.5
15.8
21.5
32.3
44.6
122.2
40.1
17.2
23September2011
AxiataGroup(AXIATAMK)
Profitandloss
Cashflow
YEDec(RMm)
2009
2010 2011F
2012F
2013F
13,312.2 15,620.7 16,511.5 17,489.1 18,411.9
Revenue
EBITDA
5,420.0 7,054.0 7,520.2 7,930.0 8,257.7
Depr&Amort
(2,469.1) (4,038.4) (3,045.5) (3,069.1) (3,140.7)
3,214.0 3,450.6 4,554.7 4,952.9 5,222.8
OperatingProfit(EBIT)
(786.3) (517.5) (481.6) (386.3) (281.6)
NetInterest(Exp)/Inc
Assoc&JV
101.3
163.7
176.0
198.5
223.9
137.2
109.0
0.0
0.0
0.0
Oneoffs&forex
PretaxProfit
2,666.2 3,205.7 4,249.0 4,765.2 5,165.1
(910.3) (1,089.2) (1,113.2) (1,262.8) (1,358.4)
Tax
(103.2) (346.2) (512.9) (572.9) (622.6)
MinorityInterest
NetProfit
1,652.7 1,770.4 2,622.9 2,929.6 3,184.1
1,406.7 2,611.4 2,622.9 2,929.6 3,184.1
RecurringNetProfit
17.3% 17.3%
5.7%
5.9%
5.3%
RevenueGrowth(%)
EBITDAGrowth(%)
24.4% 30.1%
6.6%
5.4%
4.1%
62.3%
7.4% 32.0%
8.7%
5.4%
EBITGrowth(%)
231.9%
7.1% 48.2%
11.7%
8.7%
NetProfitGrowth(%)
RecurringNetProfitGrowth(%)
23.6% 85.6%
0.4%
11.7%
8.7%
34.1% 34.0% 26.2%
26.5%
26.3%
TaxRate(%)
YEDec(RMm)
EBITDA
Noncashitems
WorkingCapitalChange
CashTaxPaid
Others
CashFlowfromOperations
Capex
AssetDisposal/(Purchase)
Others
CashFlowfromInvesting
DebtRaised/(Repaid)
EquityRaised/(Repaid)
DividendsPaid
Others
CashFlowfromFinancing
ChangeInCash
Source:Companydata,MaybankIBestimates
Balancesheet
YEDec(RMm)
FixedAssets
OtherLTAssets
Cash/STInvestments
OtherCurrentAssets
TotalAssets
STDebt
OtherCurrentLiabilities
LTDebt
OtherLTLiabilities
MinorityInterest
Shareholders'Equity
TotalLiabilitiesCapital
SharesOutstanding(m)
GrossDebt/(Cash)
NetDebt/(Cash)
WorkingCapital
10
Keyratios
YEDec
EBITDAMargin%
Op.ProfitMargin%
NetProfitMargin%
ROE%
ROA%
NetMarginEx.El%
DividendCover(x)
InterestCover(x)
AssetTurnover(x)
Asset/Debt(x)
DebtorsTurn(days)
CreditorsTurn(days)
NetGearing%
Debt/EBITDA(x)
Debt/MarketCap(x)
2009
40.7%
24.1%
12.4%
11.2%
4.4%
10.6%
0.0
(4.1)
0.4
3.0
42.7
116.9
56.7
2.3
0.3
2010
45.2%
22.1%
11.3%
9.6%
4.7%
16.7%
0.0
(6.7)
0.4
3.6
39.8
106.7
23.5
1.5
0.3
2009
2010
2011F
2012F
2013F
16,176.5 15,132.3 15,080.4 15,849.1 16,116.1
17,153.5 14,548.6 14,751.6 14,980.6 15,238.9
2,006.2 6,277.4 9,439.5 10,722.0 13,518.3
1,691.6 2,142.7 2,261.9 2,375.2 2,482.9
37,027.7 38,101.0 41,533.4 43,926.9 47,356.2
2,149.4
699.6
691.2
682.9
674.7
4,484.4 5,363.9 5,328.4 5,669.3 6,011.3
10,173.5 9,984.0 11,119.7 10,011.4 8,573.2
1,340.0 1,774.8 1,908.7 2,588.8 4,413.7
696.4 1,553.3 2,066.2 2,639.1 3,261.8
18,184.1 18,725.3 20,419.2 22,335.4 24,421.5
37,027.7 38,101.0 41,533.4 43,926.9 47,356.2
8,445.2 8,445.2 8,445.2 8,445.2 8,445.2
12,322.8 10,683.6 11,810.9 10,694.3 9,247.9
10,316.7 4,406.2 2,371.4 (27.7) (4,270.4)
(2,936.0) 2,356.6 5,681.8 6,745.0 9,315.2
2009
2010 2011F
2012F
2013F
5,420.0 7,054.0 7,520.2 7,930.0 8,257.7
736.8
69.7
50.0
50.0
50.0
(786.3) (517.5) (481.6) (386.3) (281.6)
(252.8)
110.1
116.9
190.0
210.3
(481.4) (793.1) (810.6) (919.5) (989.1)
0.0
0.0
0.0
0.0
0.0
4,636.3 5,923.3 6,394.8 6,864.2 7,247.2
(3,278.8) (2,945.5) (3,890.0) (3,790.0) (3,360.0)
2.5
109.7
0.0 (1,000.0)
0.0
106.3 2,094.3
150.7
226.5
257.3
(3,170.0) (741.6) (3,739.3) (4,563.5) (3,102.7)
(8,118.2) (944.4)
436.1 (1,108.3) (1,438.2)
5,260.0
0.0
0.0
0.0
0.0
89.7
89.2
90.0
90.0
90.0
45.4
(48.6)
0.0
0.0
0.0
(2,723.1) (903.8)
526.1 (1,018.3) (1,348.2)
(1,256.7) 4,277.9 3,181.6 1,282.5 2,796.3
2011F
45.5%
27.6%
15.9%
13.4%
6.6%
15.9%
2.8
(9.5)
0.4
3.5
40.0
106.2
11.6
1.6
0.3
2012F
45.3%
28.3%
16.8%
13.7%
6.9%
16.8%
2.9
(12.8)
0.4
4.1
40.0
106.6
NA
1.3
0.3
2013F
44.8%
28.4%
17.3%
13.6%
7.0%
17.3%
2.9
(18.5)
0.4
5.1
40.0
107.5
NA
1.1
0.2
23September2011
DiGi.com(DIGIMK)
Profitandloss
YEDec(RMm)
Revenue
EBITDA
Depr&Amort
Assoc&JV
Oneoffs
PretaxProfit
Tax
MinorityInterest
NetProfit
RecurringNetProfit
RevenueGrowth(%)
EBITDAGrowth(%)
EBITGrowth(%)
NetProfitGrowth(%)
TaxRate(%)
EPSGrowth(%)
RecurringEPSGrowth(%)
Cashflow
2009
4,909.6
2,124.6
(731.1)
1,393.4
(27.0)
0.0
0.0
1,366.5
(366.0)
0.0
1,000.5
1,000.5
2.0%
(2.1%)
(9.2%)
(12.3%)
(12.3%)
26.8%
(13.4%)
(13.4%)
2010 2011F
2012F
5,406.5 5,761.1 6,080.2
2,401.4 2,603.4 2,763.3
(773.4) (1,221.7) (1,320.0)
1,628.0 1,381.7 1,443.3
(30.9)
(30.1)
(16.2)
0.0
0.0
0.0
0.0
0.0
0.0
1,597.2 1,351.6 1,427.1
(419.2) (354.8) (374.6)
0.0
0.0
0.0
1,177.9
996.8 1,052.5
1,177.9
996.8 1,052.5
10.1%
6.6%
5.5%
13.0%
8.4%
6.1%
16.8% (15.1%)
4.5%
17.7% (15.4%)
5.6%
17.7% (15.4%)
5.6%
26.2% 26.2%
26.2%
17.7% (15.4%)
5.6%
17.7% (15.4%)
5.6%
2013F
6,414.2
2,919.3
(885.0)
2,034.3
7.4
0.0
0.0
2,041.7
(535.9)
0.0
1,505.8
1,505.8
5.5%
5.6%
40.9%
43.1%
43.1%
26.2%
43.1%
43.1%
2009
2,908.2
950.2
440.7
433.4
4,732.4
149.8
1,876.0
772.0
413.2
0.0
1,521.5
4,732.4
777.5
921.8
481.1
(1,151.7)
2010
2,959.9
846.0
850.6
480.2
5,136.6
0.0
2,271.6
1,023.0
495.5
0.0
1,346.6
5,136.6
777.5
1,023.0
172.4
(940.8)
11
2009
2010 2011F
2012F
2013F
2,124.6 2,401.4 2,603.4 2,763.3 2,919.3
286.8
232.0
230.0
210.0
210.0
(12.6)
(26.2)
(30.1)
(16.2)
7.4
(141.2)
350.6
(17.1)
93.4
97.7
(346.8) (442.7) (354.8) (374.6) (535.9)
(233.0) (179.1)
30.1
16.2
(7.4)
1,677.7 2,336.0 2,461.4 2,692.1 2,691.1
(717.2) (642.3) (578.0) (520.2) (494.2)
0.0
0.0
0.0
0.0
0.0
13.8
30.4 (188.0) (188.0) (188.0)
(703.4) (611.8) (766.0) (708.2) (682.2)
523.5
100.0
(50.0)
(50.0)
(50.0)
0.0
0.0
0.0
0.0
0.0
(1,376.2) (1,352.9) (1,267.3) (1,267.3) (1,267.3)
(12.6)
(26.2)
(30.1)
(16.2)
7.4
0.0
(24.7)
0.0
0.0
0.0
(865.2) (1,303.8) (1,347.4) (1,333.5) (1,309.9)
109.1
420.4
348.0
650.3
698.9
Keyratios
Balancesheet
YEDec(RMm)
FixedAssets
OtherLTAssets
Cash/STInvestments
OtherCurrentAssets
TotalAssets
STDebt
LTDebt
OtherLTLiabilities
MinorityInterest
Shareholders'Equity
GrossDebt/(Cash)
NetDebt/(Cash)
WorkingCapital
YEDec(RMm)
EBITDA
Othernoncashitems
CashTaxPaid
Others
Capex
Others
DebtRaised/(Repaid)
DividendsPaid
InterestPayments
Others
ChangeInCash
2011F
2,316.3
790.0
1,198.6
453.2
4,758.0
52.0
2,295.9
921.0
413.0
0.0
1,076.1
4,758.0
2012F
1,516.5
768.0
1,848.9
478.3
4,611.7
94.1
2,414.4
828.9
413.0
0.0
861.3
4,611.7
2013F
1,125.7
746.0
2,547.8
504.5
4,924.1
127.0
2,538.4
746.0
413.0
0.0
1,099.8
4,924.1
YEDec
EBITDAMargin%
Op.ProfitMargin%
NetProfitMargin%
ROE%
ROA%
NetMarginEx.El%
DividendCover(x)
InterestCover(x)
AssetTurnover(x)
Asset/Debt(x)
DebtorsTurn(days)
CreditorsTurn(days)
InventoryTurn(days)
NetGearing%
Debt/EBITDA(x)
Debt/MarketCap(x)
2009
43.3%
28.4%
20.4%
58.5%
21.3%
20.4%
0.7
(51.6)
1.0
5.1
31.2
530.6
4.1
31.6
0.4
0.0
2010
44.4%
30.1%
21.8%
82.1%
23.9%
21.8%
0.9
(52.8)
1.1
5.0
29.5
567.5
11.2
12.8
0.4
0.0
777.5
777.5
777.5
973.0
923.0
873.0
(225.6) (925.9) (1,674.9)
(696.2) (181.3)
387.0
2011F
45.2%
24.0%
17.3%
82.3%
20.1%
17.3%
0.8
(45.9)
1.2
4.9
26.0
500.0
10.0
NA
0.4
0.0
2012F
45.4%
23.7%
17.3%
108.7%
22.5%
17.3%
0.8
(89.2)
1.3
5.0
26.0
500.0
10.0
NA
0.3
0.0
2013F
45.5%
31.7%
23.5%
153.6%
31.6%
23.5%
1.2
NA
1.3
5.6
26.0
500.0
10.0
NA
0.3
0.0
23September2011
MAXIS(MAXISMK)
Profitandloss
Cashflow
YEDec(RMm)
2009
2010 2011F
2012F
2013F YEDec(RMm)
2009
2010 2011F
2012F
2013F
8,611.1 8,869.0 9,138.0 9,533.3 10,098.3 ProfitBeforeTax
Revenue
3,006.4 3,132.0 3,230.8 3,366.6 3,622.5
EBITDA
4,337.0 4,416.0 4,669.5 4,747.6 4,968.4 Depr&Amort
1,282.1 1,073.0 1,204.8 1,174.5 1,159.8
Depr&Amort
(1,282.1) (1,073.0) (1,204.8) (1,174.5) (1,159.8) NetInterest(Exp)/Inc
48.5
211.0
240.9
206.5
186.0
3,054.9 3,343.0 3,471.7 3,573.1 3,808.5 WorkingCapitalChange
(384.2)
309.0
156.8
247.9
248.5
(48.5) (211.0) (240.9) (206.5) (186.0) CashTaxPaid
(800.0) (765.0) (794.3) (827.7) (890.6)
Assoc&JV
0.0
0.0
0.0
0.0
0.0 Others
(97.8)
131.0
74.4
115.8
136.3
0.0
0.0
0.0
0.0
0.0 CashFlowfromOperations
Oneoffs
3,055.0 4,091.0 4,113.4 4,283.6 4,462.6
PretaxProfit
3,006.4 3,132.0 3,230.8 3,366.6 3,622.5 Capex
(1,217.6) (1,380.0) (1,251.9) (1,096.3) (1,110.8)
(774.7) (837.0) (869.1) (905.6) (974.5) AssetDisposal/(Purchase)
Tax
1,005.6
(75.0)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0 Others
MinorityInterest
0.0
0.0
0.0
0.0
0.0
NetProfit
2,231.6 2,295.0 2,361.7 2,461.0 2,648.1 CashFlowfromInvesting
(212.0) (1,455.0) (1,251.9) (1,096.3) (1,110.8)
2,231.6 2,295.0 2,361.7 2,461.0 2,648.1 DebtRaised/(Repaid)
RecurringNetProfit
(1,851.7)
323.0
720.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
RevenueGrowth(%)
1.9%
3.0%
3.0%
4.3%
5.9% DividendsPaid
0.0 (2,925.0) (2,400.0) (2,400.0) (2,400.0)
EBITDAGrowth(%)
(0.5%)
1.8%
5.7%
1.7%
4.7% InterestPayments
(70.0)
0.0
0.0
0.0
0.0
(4.8%)
9.4%
3.9%
2.9%
6.6% Others
EBITGrowth(%)
(1,421.3) (328.0) (200.0) (200.0) (200.0)
(7.0%)
2.8%
2.9%
4.2%
7.6% CashFlowfromFinancing
NetProfitGrowth(%)
(3,343.0) (2,930.0) (1,880.0) (2,600.0) (2,600.0)
(7.0%)
2.8%
2.9%
4.2%
7.6% ChangeInCash
(500.0) (294.0)
981.5
587.3
751.7
(7.0%)
2.8%
2.9%
4.2%
7.6%
EPSGrowth(%)
(7.0%)
2.8%
2.9%
4.2%
7.6%
25.8% 26.7% 26.9%
26.9%
26.9%
TaxRate(%)
Balancesheet
Keyratios
YEDec(RMm)
FixedAssets
OtherLTAssets
Cash/STInvestments
OtherCurrentAssets
TotalAssets
STDebt
LTDebt
OtherLTLiabilities
MinorityInterest
Shareholders'Equity
GrossDebt/(Cash)
NetDebt/(Cash)
WorkingCapital
2009
4,561.8
11,104.5
742.1
939.8
17,348.1
53.5
2,814.9
5,013.1
521.4
0.0
8,945.1
17,348.1
7,500.0
5,066.7
4,324.6
(1,186.6)
2010
5,007.0
11,114.9
898.0
1,205.0
18,224.9
13.0
3,310.0
5,061.0
1,175.0
0.0
8,666.0
18,225.0
7,500.0
5,074.0
4,176.0
(1,220.0)
12
2011F
2012F
5,207.9 5,106.4
11,155.0 11,163.0
1,879.5 2,466.7
1,196.5 1,256.8
19,438.9 19,992.9
720.0
720.0
3,551.9 3,860.1
5,074.0 5,074.0
2,065.3 2,850.2
0.0
0.0
8,027.7 7,488.7
19,438.9 19,992.9
7,500.0
5,794.0
3,914.5
(1,195.9)
2013F
5,042.8
11,171.0
3,218.5
1,335.9
20,768.1
720.0
4,187.7
5,074.0
3,649.7
0.0
7,136.8
20,768.1
YEDec
EBITDAMargin%
Op.ProfitMargin%
NetProfitMargin%
ROE%
ROA%
NetMarginEx.El%
DividendCover(x)
InterestCover(x)
AssetTurnover(x)
Asset/Debt(x)
DebtorsTurn(days)
CreditorsTurn(days)
InventoryTurn(days)
NetGearing%
Debt/EBITDA(x)
Debt/MarketCap(x)
2009
50.4%
35.5%
25.9%
33.7%
17.3%
25.9%
2.0
(63.0)
0.5
3.4
33.9
334.2
17.4
48.3
1.2
0.1
2010
49.8%
37.7%
25.9%
26.1%
12.9%
25.9%
0.8
(15.8)
0.5
3.6
39.1
388.8
26.4
48.2
1.1
0.1
7,500.0 7,500.0
5,794.0 5,794.0
3,327.3 2,575.5
(856.6) (353.3)
2011F
51.1%
38.0%
25.8%
28.3%
12.5%
25.8%
0.8
(14.4)
0.5
3.4
38.0
420.0
26.0
48.8
1.2
0.1
2012F
49.8%
37.5%
25.8%
31.7%
12.5%
25.8%
0.8
(17.3)
0.5
3.5
38.0
420.0
26.0
44.4
1.2
0.1
2013F
49.2%
37.7%
26.2%
36.2%
13.0%
26.2%
0.9
(20.5)
0.5
3.6
38.0
420.0
26.0
36.1
1.2
0.1
23September2011
TelekomMalaysia(TMK)
Profitandloss
YEDec(RMm)
Revenue
EBITDA
Depr&Amort
Assoc&JV
Oneoffs
PretaxProfit
Tax
MinorityInterest
NetProfit
RecurringNetProfit
RevenueGrowth(%)
EBITDAGrowth(%)
EBITGrowth(%)
NetProfitGrowth(%)
TaxRate(%)
EPSGrowth(%)
Cashflow
2009
4,909.6
2,124.6
(731.1)
1,393.4
(27.0)
0.0
0.0
1,366.5
(366.0)
0.0
1,000.5
1,000.5
2.0%
(2.1%)
(9.2%)
(12.3%)
(12.3%)
26.8%
(13.4%)
(13.4%)
2010 2011F
2012F
5,406.5 5,761.1 6,080.2
2,401.4 2,603.4 2,763.3
(773.4) (1,221.7) (1,320.0)
1,628.0 1,381.7 1,443.3
(30.9)
(30.1)
(16.2)
0.0
0.0
0.0
0.0
0.0
0.0
1,597.2 1,351.6 1,427.1
(419.2) (354.8) (374.6)
0.0
0.0
0.0
1,177.9
996.8 1,052.5
1,177.9
996.8 1,052.5
10.1%
6.6%
5.5%
13.0%
8.4%
6.1%
16.8% (15.1%)
4.5%
17.7% (15.4%)
5.6%
17.7% (15.4%)
5.6%
26.2% 26.2%
26.2%
17.7% (15.4%)
5.6%
17.7% (15.4%)
5.6%
2013F
6,414.2
2,919.3
(885.0)
2,034.3
7.4
0.0
0.0
2,041.7
(535.9)
0.0
1,505.8
1,505.8
5.5%
5.6%
40.9%
43.1%
43.1%
26.2%
43.1%
43.1%
2009
2,908.2
950.2
440.7
433.4
4,732.4
149.8
1,876.0
772.0
413.2
0.0
1,521.5
4,732.4
777.5
921.8
2010
2,959.9
846.0
850.6
480.2
5,136.6
0.0
2,271.6
1,023.0
495.5
0.0
1,346.6
5,136.6
777.5
1,023.0
13
2009
2010 2011F
2012F
2013F
2,124.6 2,401.4 2,603.4 2,763.3 2,919.3
286.8
232.0
230.0
210.0
210.0
(12.6)
(26.2)
(30.1)
(16.2)
7.4
(141.2)
350.6
(17.1)
93.4
97.7
(346.8) (442.7) (354.8) (374.6) (535.9)
(233.0) (179.1)
30.1
16.2
(7.4)
1,677.7 2,336.0 2,461.4 2,692.1 2,691.1
(717.2) (642.3) (578.0) (520.2) (494.2)
0.0
0.0
0.0
0.0
0.0
13.8
30.4 (188.0) (188.0) (188.0)
(703.4) (611.8) (766.0) (708.2) (682.2)
523.5
100.0
(50.0)
(50.0)
(50.0)
0.0
0.0
0.0
0.0
0.0
(1,376.2) (1,352.9) (1,267.3) (1,267.3) (1,267.3)
(12.6)
(26.2)
(30.1)
(16.2)
7.4
0.0
(24.7)
0.0
0.0
0.0
(865.2) (1,303.8) (1,347.4) (1,333.5) (1,309.9)
109.1
420.4
348.0
650.3
698.9
Keyratios
Balancesheet
YEDec(RMm)
FixedAssets
OtherLTAssets
Cash/STInvestments
OtherCurrentAssets
TotalAssets
STDebt
LTDebt
OtherLTLiabilities
MinorityInterest
Shareholders'Equity
GrossDebt/(Cash)
YEDec(RMm)
EBITDA
Othernoncashitems
CashTaxPaid
Others
Capex
Others
DebtRaised/(Repaid)
DividendsPaid
InterestPayments
Others
ChangeInCash
2011F
2,316.3
790.0
1,198.6
453.2
4,758.0
52.0
2,295.9
921.0
413.0
0.0
1,076.1
4,758.0
2012F
1,516.5
768.0
1,848.9
478.3
4,611.7
94.1
2,414.4
828.9
413.0
0.0
861.3
4,611.7
777.5
973.0
777.5
923.0
2013F
1,125.7
746.0
2,547.8
504.5
4,924.1
127.0
2,538.4
746.0
413.0
0.0
1,099.8
4,924.1
YEDec
EBITDAMargin%
Op.ProfitMargin%
NetProfitMargin%
ROE%
ROA%
NetMarginEx.El%
DividendCover(x)
InterestCover(x)
AssetTurnover(x)
Asset/Debt(x)
DebtorsTurn(days)
CreditorsTurn(days)
InventoryTurn(days)
NetGearing%
Debt/EBITDA(x)
Debt/MarketCap(x)
2009
43.3%
28.4%
20.4%
58.5%
21.3%
20.4%
0.7
(51.6)
1.0
5.1
31.2
530.6
4.1
31.6
0.4
0.0
2010
44.4%
30.1%
21.8%
82.1%
23.9%
21.8%
0.9
(52.8)
1.1
5.0
29.5
567.5
11.2
12.8
0.4
0.0
777.5
873.0
2011F
45.2%
24.0%
17.3%
82.3%
20.1%
17.3%
0.8
(45.9)
1.2
4.9
26.0
500.0
10.0
NA
0.4
0.0
2012F
45.4%
23.7%
17.3%
108.7%
22.5%
17.3%
0.8
(89.2)
1.3
5.0
26.0
500.0
10.0
NA
0.3
0.0
2013F
45.5%
31.7%
23.5%
153.6%
31.6%
23.5%
1.2
NA
1.3
5.6
26.0
500.0
10.0
NA
0.3
0.0
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Plantation&Fishery
THAILAND
StephenLOWYHeadofResearch
+6626586300x4760stephen@kimeng.co.th
WatcharaSATITPORNUMNUAY
+6626586300x4770watchara.s@kimeng.co.th
Retail
Bank
PuttikulACKARACHALANONTH
Utilities
ECONOMICS
LuzLORENZOEconomist
+6328498836luz_lorenzo@atr.com.ph
Philippines
Indonesia
REGIONAL
ONGSengYeow
+6564321832ongsengyeow@kimeng.com
RegionalProducts&Planning
Recommendationdefinitions
Ourrecommendationisbasedonthe
followingexpectedprice
performancewithin12months:
+15%andabove:BUY
15%to+15%:HOLD
15%orworse:SELL
23September2011
APPENDIXI:TERMSFORPROVISIONOFREPORT,DISCLOSURES
AND
DISCLAIMERS
Thisreport,andanyelectronicaccesstoit,isrestrictedtoandintendedonlyforclientsofKimEngResearchPte.Ltd.("KER")ora
relatedentitytoKER(asthecasemaybe)whoareinstitutionalinvestors(forthepurposesofboththeSingaporeSecuritiesand
FuturesAct(SFA)andtheSingaporeFinancialAdvisersAct(FAA))andwhoareallowedaccessthereto(eachan"Authorised
Person")andissubjecttothetermsanddisclaimersbelow.
IFYOUARENOTANAUTHORISEDPERSONORDONOTAGREETOBEBOUNDBYTHETERMSANDDISCLAIMERSSETOUTBELOW,
YOUSHOULDDISREGARDTHISREPORTINITSENTIRETYANDLETKERORITSRELATEDENTITY(ASRELEVANT)KNOWTHATYOUNO
LONGERWISHTORECEIVESUCHREPORTS.
Thisreportprovidesinformationandopinionsasreferenceresourceonly.Thisreportisnotintendedtobeanddoesnotconstitute
financialadvice,investmentadvice,tradingadviceoranyotheradvice.Itisnottobeconstruedasasolicitationoranoffertobuy
orsellanysecuritiesorrelatedfinancialproducts.Theinformationandcommentariesarealsonotmeanttobeendorsementsor
offeringsofanysecurities,options,stocksorotherinvestmentvehicles.
Thereporthasbeenpreparedwithoutregardtotheindividualfinancialcircumstances,needsorobjectivesofpersonswhoreceive
it.Thesecuritiesdiscussedinthisreportmaynotbesuitableforallinvestors.Readersshouldnotrelyonanyoftheinformation
hereinasauthoritativeorsubstitutefortheexerciseoftheirownskillandjudgmentinmakinganyinvestmentorotherdecision.
Readersshouldindependentlyevaluateparticularinvestmentsandstrategies,andareencouragedtoseektheadviceofafinancial
adviserbeforemakinganyinvestmentorenteringintoanytransactioninrelationtothesecuritiesmentionedinthisreport.The
appropriatenessofanyparticularinvestmentorstrategywhetheropinedonorreferredtointhisreportorotherwisewilldepend
onaninvestorsindividualcircumstancesandobjectivesandshouldbeconfirmedbysuchinvestorwithhisadvisersindependently
beforeadoptionorimplementation(eitherasisorvaried).Youagreethatanyandalluseofthisreportwhichyoumake,issolelyat
your own risk and without any recourse whatsoever to KER, its related and affiliate companies and/or their employees. You
understandthatyouareusingthisreportATYOUROWNRISK.
This report is being disseminated to or allowed access by Authorised Persons in their respective jurisdictions by the Kim Eng
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orindividually,asthecontextrequires,"KimEng")whichhas,visvisarelevantAuthorisedPerson,approvedof,andissolely
responsibleinthatjurisdictionfor,thecontentsofthispublicationinthatjurisdiction.
KimEng,itsrelatedandaffiliatecompaniesand/ortheiremployeesmayhaveinvestmentsinsecuritiesorderivativesofsecurities
ofcompaniesmentionedinthisreport,andmaytradetheminwaysdifferentfromthosediscussedinthisreport.Derivativesmay
beissuedbyKimEngitsrelatedcompaniesorassociated/affiliatedpersons.
KimEnganditsrelatedandaffiliatedcompaniesareinvolvedinmanybusinessesthatmayrelatetocompaniesmentionedinthis
report. These businesses include market making and specialised trading, risk arbitrage and other proprietary trading, fund
management,investmentservicesandcorporatefinance.
Exceptwithrespectthedisclosuresofinterestmadeabove,thisreportisbasedonpublicinformation.KimEngmakesreasonable
effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. The reader
should also note that unless otherwise stated, none of Kim Eng or any thirdparty data providers make ANY warranties or
representations of any kind relating to the accuracy, completeness, or timeliness of the data they provide and shall not have
liabilityforanydamagesofanykindrelatingtosuchdata.
ProprietaryRightstoContent.Thereaderacknowledgesandagreesthatthisreportcontainsinformation,photographs,graphics,
text,images,logos,icons,typefaces,and/orothermaterial(collectivelyContent)protectedbycopyrights,trademarks,orother
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developed. The Content is the property of Kim Eng or that of third party providers of content or licensors. The compilation
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protected by Singapore and international copyright laws. The reader may not copy, modify, remove, delete, augment, add to,
publish, transmit, participate in the transfer, license or sale of, create derivative works from, or in any way exploit any of the
Content,inwholeorinpart,exceptasspecificallypermittedherein.Ifnospecificrestrictionsarestated,thereadermaymakeone
copyofselectportionsoftheContent,providedthatthecopyismadeonlyforpersonal,information,andnoncommercialuseand
thatthereaderdoesnotalterormodifytheContentinanyway,andmaintainanynoticescontainedintheContent,suchasall
copyright notices, trademark legends, or other proprietary rights notices. Except as provided in the preceding sentence or as
permittedbythefairdealingprivilegeundercopyrightlaws,thereadermaynotreproduce,ordistributeinanywayanyContent
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15
23September2011
Additionalinformationonmentionedsecuritiesisavailableonrequest.
JurisdictionSpecificAdditionalDisclaimers:
THISRESEARCHREPORTISSTRICTLYCONFIDENTIALTOTHERECIPIENT,MAYNOTBEDISTRIBUTEDTOTHEPRESSOROTHERMEDIA,
AND MAY NOT BE REPRODUCED IN ANY FORM AND MAY NOT BE TAKEN OR TRANSMITTED INTO THE REPUBLIC OF KOREA, OR
PROVIDED OR TRANSMITTED TO ANY KOREAN PERSON. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF SECURITIES LAWS IN THE REPUBLIC OF KOREA. BY ACCEPTING THIS REPORT, YOU AGREE TO BE BOUND BY THE
FOREGOINGLIMITATIONS.
THISRESEARCHREPORTISSTRICTLYCONFIDENTIALTOTHERECIPIENT,MAYNOTBEDISTRIBUTEDTOTHEPRESSOROTHERMEDIA,
AND MAY NOT BE REPRODUCED IN ANY FORM AND MAY NOT BE TAKEN OR TRANSMITTED INTO MALAYSIA OR PROVIDED OR
TRANSMITTED TO ANY MALAYSIAN PERSON. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF
SECURITIESLAWSINMALAYSIA.BYACCEPTINGTHISREPORT,YOUAGREETOBEBOUNDBYTHEFOREGOINGLIMITATIONS.
Withoutprejudicetotheforegoing,thereaderistonotethatadditionaldisclaimers,warningsorqualificationsmayapplyifthe
readerisreceivingoraccessingthisreportinorfromotherthanSingapore.
Asof23September2011,KimEngResearchPte.Ltd.andthecoveringanalystdonothaveanyinterestinthestocksmentioned.
AnalystCertification:
The views expressed in this research report accurately reflect the analyst's personal views about any and all of the subject
securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the
specificrecommendationsorviewsexpressedinthereport.
2011 Kim Eng Research Pte Ltd. All rights reserved. Except as specifically permitted, no part of this presentation may be
reproducedordistributedinanymannerwithoutthepriorwrittenpermissionofKimEngResearchPte.Ltd.KimEngResearchPte.
Ltd.acceptsnoliabilitywhatsoeverfortheactionsofthirdpartiesinthisrespect.
16
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Regional Telco: Plugging The Data Gusher, Part 1

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RegionalTelecommunications|23September2011

However,therehasbeennocorrespondingincreasein dataARPU,whilein the

In Malaysia, our BUY call on TM is premised on its growing strength in fixed

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