KUALA LUMPUR: Hong Leong Investment Bank (HLIB Research) is maintaining 'hold' for CelcomDigi Bhd with an unchanged target price of RM4.30.
The research firm said that while waiting for more clarifications on the 5G industry structure and its strategy ahead, a dividend yield of 4.0 per cent should sustain the share price of the company in the near term.
CelcomDigi Bhd, Malaysia's biggest wireless carrier by subscribers, reported that its net profit more than tripled in the fourth quarter of 2023.
Its net profit for the three months ended Dec 31, 2023 was RM435.11 million, compared to RM127.36 million over the same period a year before that.
The company's revenue for the quarter rose 50 per cent year-on-year (YoY) to RM3.27 billion from RM2.18 billion.
CelcomDigi projected that service revenue growth would be in the "low single digits" for 2024, while earnings before interest and taxes would rise at a "similar level to 2023."
The company also planned 15 per cent to 18 per cent in capital expenditure as a proportion to its total revenue.
HLIB Research said CelcomDigi's net profit of RM2.18 billion for the three months of FY24 met expectations, contributed by all segments except prepaid, which remained flat.
It said forecasted earnings for FY24 and FY25 for the company are revised upwards by 11 per cent, respectively.
"For the full year, the core net profit matched expectations at 98 per cent but exceeded consensus forecasts at 146 per cent.
Furthermore, it said that the company's postpaid subscriber base increased by 74,000 QoQ to 6.9 million in 4Q23, while prepaid experienced a subscriber attrition of 132,000 due to the removal of non-revenue generating subscribers.
Meanwhile, its home fibre revenue increased, supported by the addition of 10,000 QoQ connections.