Posted by maradonut > 2013-08-27 17:13 | Report Abuse

Buy (maintained)

Target price: RM6.04

ALTHOUGH DiGi's stock price has appreciated 38.6% year-to-date, DiGi remains a key pick for the telco sector moving into 2013.

Our buy rating is premised on DiGi's continued growth story and strong capital management initiatives.

Both factors, in our view, are likely to drive stock price towards our discounted cash flow target price of RM6.04 (based on a weighted-average cost of capital of 6.3% and growth of 1%).

As at the third quarter (Q3) of 2012, DiGi's revenue market share expanded to 28%, up from 27.5% from end 2011 (27% as at end 2010).Growth has largely been driven by its above peer average net adds over the past two years which was also accompanied by a fairly stable, if not, higher average revenue per user (ARPU).

We believe that its growth month-on-month momentum will persist as it consolidates its market share in the youth and Malay ethnic group segments, two key growth areas.

We understand that DiGi's market share in the Malay ethnic market segment remains below average and has recently only hit double digit market share.

On the one hand, while this is extremely low, especially for an established telco player, this also leaves significant scope for growth in the near future. We believe that improving its 3G footprint would be key to driving this growth.

Management targets to accomplish more than 70% population coverage by end of next year (it is about 63% currently) and thus enabling DiGi to offer their services across new markets, and particularly in new areas of coverage.

The roll out of 3G coverage also enhances DiGi's postpaid proposition, which should further aid ARPU enhancement.

With its revenue and growth trajectory intact, we are forecasting core dividend per share (DPS) to improve in financial year (FY) 2013. Although our FY13 DPS assumption is based on a 100% dividend payout, we nevertheless suspect that there is potential for upside to our DPS forecast of 22.6 sen for FY13.

Management has reaffirmed its commitment to optimising shareholder returns which thus leaves upside risk. A potential way of extracting more returns for shareholders is via a business trust structure, an option that management is already evaluating.

Key investment risk includes irrational competition which could potentially lead to higher handset subsidies and lower tariffs.

This could be sparked off by the recent round of lower interconnect rates, although we believe that the incumbents are likely to remain rationale.

The awarded LTE spectrum would also raise the number of players in the market, although being a niche high end product, impact from the smaller players are likely to be less meaningful.

Posted by Fong Kh > 2013-08-28 12:48 | Report Abuse

firm

Posted by Investee > 2013-08-28 13:51 | Report Abuse

Seems to be strong in downturn now. Warrant drop in price significantly. Time to buy warrant, right?

Posted by felixmaskx > 2013-08-28 14:43 | Report Abuse

digi no show ? very defensive

Posted by Storm > 2013-08-30 13:01 | Report Abuse

Hi guys, do you know how to check for current shareholding of Digi ?

Posted by dr_jogho > 2013-08-30 15:15 | Report Abuse

target price digi
rm5.24 +0.57 (12.21%) BUY KENANGA

Posted by maradonut > 2013-09-04 10:52 | Report Abuse

soon 5.85

Posted by Stockman > 2013-09-05 08:36 | Report Abuse

with hike in petrol price, more people are using telco services like Digi

Posted by dr_jogho > 2013-09-05 13:22 | Report Abuse

end this week hope digi will broken rm4.70

Posted by wwwcomment > 2013-09-05 14:16 | Report Abuse

this counter is quite boring lately. if not becasue of the dividend, i will sell all i have

Posted by papa > 2013-09-05 14:24 | Report Abuse

I'm give up for this counter

Posted by wwwcomment > 2013-09-05 14:28 | Report Abuse

i am holding on due to the dividend. good thing is it wont drop much even in bad sentiment period.

Posted by dr_jogho > 2013-09-05 15:41 | Report Abuse

Average Price Target: 4.96

Posted by NRobert > 2013-09-06 01:41 | Report Abuse

EPF keep dumping Digi everyday! where got hope to rise? better buy Maxis.

Posted by Storm > 2013-09-06 16:26 | Report Abuse

sell down of epf might be to raise liquidity of Digi shares. Possible for telenor to initiate share buyback of Digi shares and later to use it to buy spectrum?

Posted by Storm > 2013-09-10 09:19 | Report Abuse

Report "Digi, Green Packet in talks on 4G tie up" by business times today!

Posted by dr_jogho > 2013-09-11 08:38 | Report Abuse

maybe today will green again after 4 days before is green

Posted by zKingDB > 2013-09-11 16:57 | Report Abuse

Go check how many EPF dumping these few 4 days..... disposed around 5,000,000 unit share......
Bagus.......

Posted by Storm > 2013-09-11 23:39 | Report Abuse

This might be a good time to accumulate. Might have news on the business trust next week

Posted by Storm > 2013-09-11 23:39 | Report Abuse

Target price at rm 5.20

Posted by nicole76 > 2013-09-12 11:31 | Report Abuse

If can maintain above 4.75 resistance line hold your prices above this, it'll be smooth sailing towards rm5. Good luck everyone!

Posted by Darren Loke > 2013-09-12 12:11 | Report Abuse

fingers crossed

Posted by chelvis7 > 2013-09-12 13:08 | Report Abuse

buy now before u regret,

Posted by skyboyman > 2013-09-12 13:14 | Report Abuse

limited downside, big potential upside.. cheer everyone..

Posted by melvin18 > 2013-09-12 15:36 | Report Abuse

still can buy ??

Posted by koyak71 > 2013-09-12 15:45 | Report Abuse

Still can buy la. I prefer to buy digi sw to get more % profit. Digi cl is a good bet

Posted by koyak71 > 2013-09-12 16:24 | Report Abuse

If mother share sustain at 4.77 tomorrow will go up further

Posted by kenken85 > 2013-09-12 17:01 | Report Abuse

ohh yes. DIGI day. =)

Posted by haikeyila > 2013-09-12 17:05 | Report Abuse

Where is RHB now with their 4.10 TP? Must be kicking themselves for shorting this counter.

Posted by koyak71 > 2013-09-12 17:20 | Report Abuse

Rhb tp 4.10 on july thats why epf dump the shares. I follow rhb recommendations to buy ir sell bcoz epf will follow thier related company

Posted by koyak71 > 2013-09-12 17:21 | Report Abuse

Anyway only trade sw only

Posted by nicole76 > 2013-09-12 17:28 | Report Abuse

As long as investors don't panic and sell then it'll have momentum to go up further above rm5 ;)

Posted by necro > 2013-09-12 17:33 |

Post removed.Why?

Posted by haikeyila > 2013-09-12 18:02 | Report Abuse

there was an article in the Edge stating that 1 lot of investment in Digi shares in 2009 costing RM2300 is now worth RM60,000. Anyone can vouch for this?
too bad i was still a pony-tailed schoolgirl back then.

Posted by lwalk > 2013-09-12 18:23 | Report Abuse

from the edge: rm2.27 for 1,000 digi shares start of 2008 would today be holding 10,000 digi shares worth nearly rm50,000

Posted by Storm > 2013-09-12 22:30 | Report Abuse

If you didn't buy Digi CL today then you might be a bit late. SG analyst already flag Digi as hot stock, revise target price to RM 5.60. Kiasu people will rush in tomorrow morning. Confirm in bull run cycle with volume triple daily average. With possible good news announcing next week, So estimated tomolo test RM 5.00 resistance, Digi CL will be around Rm 0.055 by end of day. Digi Boleh!

Posted by koyak71 > 2013-09-12 22:49 | Report Abuse

Thanks storm, kalau betul boleh naik to 5.60 digi cl value at 20 cents. Luckily I join the boat today not much 50k units only just to play safe due to expiry date on 25/9.

Posted by kenken85 > 2013-09-13 09:16 | Report Abuse

50k is not much? what u guys doing one? why u guy so rich? going up again. =) finally..

Posted by lwalk > 2013-09-13 09:23 | Report Abuse

lets see whether EPF will bring it down again on a up-down-up-down trend..

Posted by kenken85 > 2013-09-13 09:25 | Report Abuse

epf disposing a lot yest also. but what make it still can up 10cents? It show it is a good counter. Jus keep until it become another rm 50,000. haha.

Posted by koyak71 > 2013-09-13 09:39 | Report Abuse

Today, DIGI need to sustain at 4.80 or above. otherwise will drop back

Posted by richcares > 2013-09-13 09:50 | Report Abuse

make my day Digi

Posted by streamer555 > 2013-09-13 10:05 | Report Abuse

break 4.80,should go up further

Posted by Leong CF > 2013-09-13 10:10 | Report Abuse

look forward to rm5

Posted by koyak71 > 2013-09-13 10:11 | Report Abuse

Hope will go up to 4.90 , so digi cl FV at 2.5 cent.

Posted by htyeap125 > 2013-09-13 10:12 | Report Abuse

at times, i juz wonder. EPF is unloading but how come price keeps going up.........

Posted by skyboyman > 2013-09-13 10:15 | Report Abuse

this mean, foreign is buying.. when they start to buy, price will shoot up..

Posted by koyak71 > 2013-09-13 11:05 | Report Abuse

ini digi sudah lama tido bro

Posted by zKingDB > 2013-09-13 11:08 | Report Abuse

EPF Buang DIGI Share.....

Disposed 4,768,000 units ......

Careful ~

Posted by kenken85 > 2013-09-13 11:19 | Report Abuse

seem like it can defend 4.80 well. No problem dude