Maxis Aiming For U Mobile?

Maxis could be eyeing a partnership or stake in U Mobile. According to PublicInvest Research, Maxis may either collaborate with or partially acquire U Mobile, the operator recently awarded the country’s second 5G network.

They suggested Maxis might buy a portion—or all—of the 28.3% stake that U Mobile's major shareholder, Straits Mobile Investments, is selling.

U Mobile, aiming to cut its foreign shareholding to 20% to align with Malaysia’s national interests, needs a strong local partner to help manage the hefty 5G investment costs, PublicInvest noted.

Maxis, on the other hand, currently pays RM360 million yearly to Digital Nasional Bhd (DNB) for 5G access, an arrangement that could change if it joins forces with U Mobile.

Since the announcement of the second 5G network, Maxis shares have dropped over 6%, although the stock did see a slight rise to RM3.59 on Monday, with a market cap of RM28.2 billion.

Financially, Maxis reported a solid 28% year-on-year profit increase for the third quarter of 2024, meeting expectations.

Analysts largely advise a “hold” rating on Maxis, with some recommending a “buy,” and project a net profit of RM1.4 billion for 2024 on revenues of RM10.39 billion.

Projections for 2025 suggest further growth with expected revenue of RM10.66 billion.

MIDF Research highlighted Maxis’ strong cash flow, driven by efficient capital spending, particularly in high-performing segments like postpaid, home connectivity, and data solutions.

While Maxis is taking a cautious approach to dividends, MIDF believes it may soon revert to its original quarterly payout of five sen per share as 5G-related capex increases.