CelcomDigi (CDB MK)

MALAYSIA | TELECOMS | RESULT

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Source: Bloomberg

CelcomDigi (CDB)’s 6M25 revenue increased by 1.8% YoY to RM6.4bn, supported by higher device sales from bundled offerings. The postpaid and home fibre segments remained growth drivers, with subscribers rising 6% YoY to 5.95m and 66% YoY to 236k, respectively. However, overall topline momentum was partly offset by continued weakness in the prepaid segment, where subscribers declined 3% YoY to 12.6m. 6M25 EBITDA margin decreased by 0.9ppts to 42.8% due to higher device and traffic costs associated with rising data usage. Consequently, 6M25 core net profit of RM816m (-12.2% YoY) was within our expectations but below consensus expectations, accounting for 45% and 43% respectively. CDB declared a second interim DPS of 3.8sen, bringing total 6M25 dividends to 7.5sen (vs 7.0sen in 6M24).

CDB reported a mixed set of operational results in 2Q25. Sequentially, postpaid subs grew slightly by 1.3% while prepaid subs declined by 3.1%. The home fibre segments recorded stronger subs growth, rising 15.1% with 31k net additions QoQ by robust demand for CelcomDigi One plans, which continued to drive convergence growth. However, overall service revenue inched up by 1.4% QoQ to RM2.7bn, as muted performances in postpaid (+1.2% QoQ) and prepaid (-0.6% QoQ) offset the stronger growth in the home fibre segment (+10.9% QoQ). Management is guiding for low single-digit service revenue growth, low to mid-single digit EBIT growth, and a capex intensity of 14-16% for 2025.

We maintain our earnings forecasts but revise down our DCF-derived 12-month TP to RM3.95 (from RM4.19) after incorporating a higher risk premium. Our WACC assumption is raised to 8.2% (from 8.0%) to reflect execution risks tied to the 5G rollout, as well as intensifying competitive pressures in Malaysia’s mature and saturated mobile market, where penetration has reached c.150%, limiting ARPU upside. Upside risks include higher-than-expected ARPU growth. Downside risks include tougher competition and slower-than-expected synergy realization.

Sources: Company, Bloomberg, Phillip Research forecasts

Y/E Dec (RMm)

Sources: Company, Phillip Research

Sources: Company, Phillip Research

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