A MEMBER OF THE TA GROUP
Telecommunications Sector
CDB, MAXIS & YTLP Provide RM116.7mn Each to DNB
CDB, MAXIS, and YTLP have each extended an additional RM116.7mn in shareholder advances
to Digital Nasional Bhd (DNB) to support the 5G network wholesaler’s operations and working
capital requirements. The new advances raise each of CDB’s, MAXIS’s, and YTLP’s cumulative
contributions to RM750.0mn, inclusive of RM233.2mn in earlier injections. Meanwhile, the
shareholding structure remains unchanged, with each party maintaining a 19.4% stake in DNB. The
Ministry of Finance remains the largest shareholder with a 41.7% stake, with total commitments
rising to RM750.3mn after combining equity and advances.
Exhibit 1: Shareholding Structure of DNB
| Shareholder | Issued Share Capital (RM) | Shareholder Advance (RM) | Additional Shareholder Advance (RM) | Cumulative Percentage of Issued Share Capital and Shareholder Advance (%) |
|---|---|---|---|---|
| Ministry of Finance | 500,100,002 | – | 350,202,928 | 41.7 |
| CDB | 133,333 | 233,233,333 | 116,666,667 | 19.4 |
| MAXIS | 133,333 | 233,233,333 | 116,666,667 | 19.4 |
| YTLP | 133,333 | 233,233,333 | 116,666,667 | 19.4 |
Source: TA Securities, CDB, MAXIS
The advances are interest-free, repayable only by mutual agreement, and potentially treated as
prepayments for 5G access costs with DNB. Meanwhile, DNB has established a steering
committee to oversee the management of its working capital and to provide regular updates to
shareholders.
Our View
We believe the additional funding injection is necessary for DNB to remain competitive,
particularly with the emergence of U Mobile, which is rolling out a second 5G network that could
hurt DNB should access seekers migrate to the alternative provider. To recap, U Mobile is
targeting 80% 5G population coverage by 2H26. To stay ahead of the curve, DNB will need to
continuously upgrade its network infrastructure and enhance service quality. We expect both CDB
and MAXIS should be able to fund this exercise with their internal funds, given their cash piles of
RM640.8mn and RM1.2bn, respectively, as of 1QFY25.
Maintain Overweight
In all, we maintain an OVERWEIGHT stance in the telecommunications sector. We foresee
service revenue remaining resilient amid the competitive operating environment, as mobile
operators are expected to focus on value propositions rather than engage in irrational price
competition. Within our universe, we maintain Buy recommendations for AXIATA (TP:
RM3.09), CDB (TP: RM4.50), and TM (TP: RM8.30), while maintaining a Hold recommendation
for MAXIS (TP: RM3.68). Key downside risks include unprecedented price competition and
unfavourable regulatory changes.
Table 1: Peers
| Company | Call | ESG | Price (RM) | TP (RM) | EV/EBITDA (x) | PE (x) | PF (x) | EPS Growth CY25F (%) | EPS Growth CY26F (%) | Div. Yield CY25F (%) | Div. Yield CY26F (%) | ROE CY25F (%) | ROE CY26F (%) | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AXIATA | BUY | ★★★ | 2.69 | 3.09 | 9.2 | 8.5 | 37.4 | 32.0 | -22.4 | 16.7 | 3.7 | 3.7 | 2.7 | 3.4 |
| MAXIS | HOLD | ★★★★ | 3.68 | 3.68 | 8.4 | 8.7 | 18.0 | 16.7 | 8.2 | 7.7 | 4.8 | 4.6 | 24.6 | 24.0 |
| CDB | BUY | ★★★★ | 3.77 | 4.50 | 9.6 | 9.2 | 21.2 | 19.0 | 11.7 | 9.6 | 4.9 | 4.9 | 13.2 | 14.7 |
| TM | BUY | ★★★★ | 7.10 | 8.30 | 9.2 | 5.9 | 16.2 | 15.0 | -10.5 | 7.6 | 3.6 | 3.7 | 14.1 | 15.2 |
| Weighted average | 8.5 | 8.2 | 20.6 | 19.2 | 0.5 | 7.6 | 4.3 | 4.1 | 18.3 | 19.1 | ||||
Source: Companies, TA Securities
Sector Recommendation Guideline
- OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
- NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
- UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
- BUY : Total return of the stock exceeds 12%.
- HOLD : Total return of the stock is within the range of 7% to12%.
- SELL : Total return of the stock is lower than 7%.
- Not Rated : The company is not under coverage. The report is for information only.
Total Return of the stock comprises targeted share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount models valuation used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
-
Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions.
+5% premium to target price -
More than adequate integration of ESG factors into operations, management and future directions.
+3% premium to target price -
Adequate integration of ESG factors into operations, management and future directions.
No change to target price -
Have some integration of ESG factors in operations and management but are insufficient.
-3% discount to target price -
Minimal or no integration of ESG factors in operations and management.
-5% discount to target price
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without
notice. This report is for information only and should not be construed as an offer or solicitation for the purchase or sale of any stock or securities arising from the date of this document.
We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Monday, August 18, 2025, the analyst, Chan Mun Chun, who prepared this report, has interest in the following securities covered in this report:
(a) NIL
