DIGI–Fundamental Analysis (27 Apr 2014)

DIGI Analysis:-

Excel – http://1drv.ms/1hAxheS

My View:-

– Fair values:
  – 5Y DCF: 4.97 – 5.68 (MOS: -8% – 6%)
  – EY%: Buy below 5.08, sell above 5.62
  – Both models indicate that DIGI is either overvalued or fully valued.
– The outperformance of 4Q13 was mainly due to lower-than-expected depreciation and taxes. I am not sure whether this is something recurring for long term.
– With Internet subscribers increased by 14.5% and blended ARPU increased by a modest 2.1% to RM48, I am quite positive with DIGI future prospects.
– DiGi.Com attributed the better results to higher usage of mobile Internet services with Internet customers growing to four million from three million a year ago, contributing RM374 million to its revenue in FY14Q1.
– However, I believe that DIGI is currently fully (or nearly) valued.
– The last time I accumulated DIGI was in Jul 2013 at 4.66. Thus, I won’t accumulate DIGI for the time being.

Latest Financial – Q1 2014 Financial Report (25 Apr 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1604049

At the time of writing, I owned shares of DIGI.


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