Friday, October 30, 2009

Are you willing to buy Maxis IPO for RM5.20 at PE 17?

Maxis, after privatized and delisted for some times, is coming back to KLSE again with a new IPO.

According to the latest news, they will not be issuing new shares, but will offer 2.25 billion shares, representing 30% of its existing share capital. The estimated IPO price is RM5.20 per share.

With this information, let's do some calculation.

The total shares of Maxis is 2.25 billion / 30% = 7.5 billion.

For your information, Maxis made a revenue of RM8.45 billion and net profit of RM2.4 billion in 2008. For the 1st half year of 2009, revenue is RM4.24 billion and net profit is RM1.14 billion.

Let's estimate the EPS of Maxis now.

I'll estimate the net profit with the following simple guessing formula:

Multiply the half year net profit of 2009 by 2 to get a full year figure.

1.14 x 2 = 2.28

With this, the EPS will be 2.28/7.5 = 0.304

If the IPO price is 5.20, then the PE will be 5.2/0.304 = 17.11

Maxis stated that they plan to give back 75% of net profit as dividend. So the dividend will be around 0.304 x 75% = 0.228.

And the estimated DY will then be 0.228/5.20 = 4.38%

So, are you willing to buy Maxis IPO at the PE of around 17?

I think they come out with the proposed IPO price by referencing to Digi (6947), which currently has a PE of around 15.

Currently, even Digi doesn't seem attractive to me, so why should I buy Maxis at a higher PE and lower DY? This IPO is not attractive to me from the fundamental perspective.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

10 comments:

maxis said... Reply To This Comment

The maxis story has never been about dividends alone. The dividends are the sweetners - it about the growth and most importantly the next corporate action - you make a killing when TAK takes it private again or injects Astro or India back into it, at a discount.

Voyager8 said... Reply To This Comment

Hi,

If u are willing to buy story with high premium, its your choice.

Bless u.

vialentino said... Reply To This Comment

i will plan to apply for 20 lots ler...now after reading urs...need to consider again

Voyager8 said... Reply To This Comment

Hi vialentino,

Do not be easily influenced.

You should do your homework before making a decision, especially when it involves in thousands of ringgit.

The Edge of this week has an article about Maxis IPO, which provides some reasons from both side of why should buy and why shouldn't buy.

yy said... Reply To This Comment

很多人为M而疯狂,而当中又有多少个人是真正去了解,而不是跟风的呢?

Yapsassin said... Reply To This Comment

hi, sori disturb, I m studying finance nw and interested to have a research on this stock, may I noe where you get the info on Maxis revenue and others financial info at 08-09? I onli manage to get the 06 annual report onli, may I have the links? Thx!

Voyager8 said... Reply To This Comment

Hi Yapsassin,

The info is available in many public media.

Have you looked in TheEdge?

Yapsassin said... Reply To This Comment

emm...what I found in public media (website) is only certain particular financial figures and ratios only, actually I want to have a look at the complete financial statements, is it available now?

TheEdge that you state is it TheEdge Malaysia?i

Voyager8 said... Reply To This Comment

Hi Yapsassin,

Have you read the 400+ pages Maxis IPO Prospectus?

U can get from Maxis or your remisier.

Softcopy is available in the Bursa Malaysia website

Yappy said... Reply To This Comment

oh, thx much~!

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