What’s new: Service revenue was slower on Prepaid softness, offset by better Postpaid and Enterprise trends. 2025 guidance implies a similar growth momentum as 2024 and was in-line with us and consensus. In terms of shareholder remuneration, the company lifted its quarterly dividend to RM 5 sen from RM 4 sen previously, totalling RM 17 sen in 2024 (2023: RM 16sen). Maxis plans to keep a minimum quarterly dividend of RM 4 sen with a “one-time, one-cent increase” policy on outperforming years.
FY25 guidance implies similar growth momentum in 2024 and was within expectations.
- Service revenue: Low-single digit growth (NSR: 3.4%, Cons: 1.9%, 2024: +3.5%)
- EBITDA: Flat to low-single digit growth (NSR: 3.5%, Cons: 1.7%, 2024: +4.1%)
- Capex: Less than RM 1bn which implies high-single digit capex intensity on our estimates
Service revenue slower on Prepaid softness, offset by continued strength in Postpaid and better Enterprise trend. Group service revenue growth slowed to 2.1% YoY from 3.2% YoY prior on softer Prepaid (-4.3% YoY from -1.7%). This was felt by CelcomDigi too as its Prepaid declined further to 5.1% in Q4 from -4.4%. Despite this, Maxis maintained its Postpaid strength as it grew 5% YoY versus 4.9% prior (CelcomDigi: 3.7%). Overall mobile service revenue (60% of revenue) grew 1.1% YoY compared to 2.1% last quarter.
Enterprise (15% of revenue) accelerated to 6.2% YoY from 4.2%, driven by higher demand for fixed connectivity, IoT and Cloud services. The segment remains one of Maxis’ key priorities in 2025.
Fibre (9% of revenue) faced a tougher comparable and slowed to 1.6% YoY. The Home business added 7k home connections in Q4 to 723k; Home fibre ARPU improved to +1% YoY to RM109 from -0.3% previously.
Decline in mobile ARPU eased further. Mobile net additions were 89k in Q4 (2024: +315k), with 145k Postpaid net additions offsetting the 56k decline in Prepaid customers. As most of these were lower ARPU subscribers, the decline in blended mobile ARPU eased to -2.8% YoY from 5.4% prior. Of which, Prepaid ARPU eased to -5.1% YoY from -7.4% while Postpaid ARPU eased to -3.2% from -4.6%.
Q4 EBITDA weaker on tougher comparable and higher network costs. Headline EBITDA fell by 6.9% on the back of higher network costs and tougher comparable base from higher government grants received last year. Maxis delivered RM321m of net profit which was in-line with consensus.
Capex spending in 2024 was RM 674m (2023: RM 813m) which was significantly lower than the “less than RM 1bn” guidance. Maxis maintained its capex guidance for 2025 which suggests to us that the 5G dual network structure in Malaysia is likely to stay as 5G capex is offloaded to DNB and U Mobile. As such, capex is likely to be allocated towards its fibre rollout and internal digitalisation initiatives.
Mobile pricing in Malaysia appears to be staging recovery as the decline in ARPU has started to ease as seen from Maxis and CelcomDigi’s numbers. Notwithstanding the competitive mobile dynamic, Maxis continues to display strength in Postpaid where net additions were driven by its effective pre to postpaid migration strategy. In addition, Enterprise continues to show promise although trends can be cyclical in nature. Our view is that the secular demand for B2B digitalisation as small and large businesses demand more non-mobile solutions like IoT and Cloud. Additionally, Maxis had previously teased about the incremental growth expected from connectivity revenue for Data Centres. We are Buyers with a RM 5.6 price target; however, the stock is not exactly cheap as it trades at 17x FY25 P/E.
For the historical data spreadsheet, please click below.
Full 12-month historical recommendation changes are available on request
Reports produced by New Street Research LLP, 18th Floor, 100 Bishopsgate, London, EC2N 4AG. Tel: +44 20 7375 9111.
New Street Research LLP is authorised and regulated in the UK by the Financial Conduct Authority and is registered in the United States with the Securities and Exchange Commission as a foreign investment adviser.
Regulatory Disclosures: This research is directed only at persons classified as Professional Clients under the rules of the Financial Conduct Authority (‘FCA’), and must not be re-distributed to Retail Clients as defined in the rules of the FCA.
This research is for our clients only. It is based on current public information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Most of our reports are published at irregular intervals as appropriate in the analyst's judgment. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients.
All our research reports are disseminated and available to all clients simultaneously through electronic publication to our website.
New Street Research LLC is neither a registered investment advisor nor a broker/dealer. Subscribers and/or readers are advised that the information contained in this report is not to be construed or relied upon as investment, tax planning, accounting and/or legal advice, nor is it to be construed in any way as a recommendation to buy or sell any security or any other form of investment. All opinions, analyses and information contained herein is based upon sources believed to be reliable and is written in good faith, but no representation or warranty of any kind, express or implied, is made herein concerning any investment, tax, accounting and/or legal matter or the accuracy, completeness, correctness, timeliness and/or appropriateness of any of the information contained herein. Subscribers and/or readers are further advised that the Company does not necessarily update the information and/or opinions set forth in this and/or any subsequent version of this report. Readers are urged to consult with their own independent professional advisors with respect to any matter herein. All information contained herein and/or this website should be independently verified.
All research is issued under the regulatory oversight of New Street Research LLP.
Copyright © New Street Research LLP
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of New Street Research LLP.