Core earnings rose 6.6% YoY, within expectations
Maxis reported 6M25 revenue of RM5.2bn (-0.4% YoY). The decline in consumer service revenue (-1.4%) due to a new commercial SafeDevice program arrangement was offset by an increase in enterprise revenue (+2.2%) on stronger mobile subs and project deliveries. 6M25 core net profit of RM764m (+6.6% YoY) was within our and consensus expectations, accounting for 52% of our and the street’s full-year forecasts. Maxis declared a second interim DPS of 4sen, bringing cumulative 6M25 DPS to 8sen (similar to 6M24).
Mixed 2Q25 operational performance
Maxis delivered a mixed set of operational performance in 2Q25. Postpaid subs reached 4.0m in 2Q25 (+1.5% QoQ, +8.5% YoY), while prepaid subscribers stood at 5.8m (-0.4% QoQ, -0.8% YoY) amidst ongoing pressure in the price-sensitive segment. Service revenue remains relatively stable at RM2.2bn (+1.5% QoQ), with growth across consumer postpaid (+1.0%), prepaid (+2.5%), and enterprise services (+2.3%). Despite a largely stable prepaid base, revenue was supported by higher blended ARPU, up by +2.9% QoQ, rising to RM35.30 in 2Q25 (vs. RM34.30 in 1Q25) on the back of targeted product offerings. While 2Q25 revenue softened 1.8% QoQ, better operational efficiencies lifted EBITDA margin by 2.2ppts to 42.7% and core earnings by 6.5%. Management is guiding for low single-digit service revenue growth, flat-to-low single-digit EBITDA growth, and c.RM1bn capex for 2025.
Maintain HOLD with a lower TP of RM3.64.
We leave our earnings forecast unchanged but trim our DCF-derived 12-month TP to RM3.64 (from RM4.02) after incorporating a higher risk premium. Our WACC assumption has been raised to 10.4% (from 9.6%) to account for heightened execution risks on 5G rollout, and intensifying competitive pressures in Malaysia’s mature mobile market, where penetration stands at 150%, limiting ARPU growth prospects. Maintain HOLD rating. Upside risk includes stronger service revenue growth and favourable development in the 5G development plan. The downside risk would be the intensifying price competition among telco operators and slower-than-expected consumer spending.
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