Excel – http://1drv.ms/1DPdEYe
Notes – http://tinyurl.com/q7hrudm
- 5Y DCF:
- Good Scenario: 6.74 (Fair value uncertainty: MEDIUM)
- Base Scenario: 5.82 (Fair value uncertainty: HIGH)
- Bad Scenario: 5.02 (Fair value uncertainty: VERY HIGH)
- Ugly Scenario: 4.31 (Fair value uncertainty: EXTREME)
- At current price (6.01), based on RDCF, assumption of FCFF growth rate in the next 5 years is 8.2%.
- Absolute EY%:
- FY14 (EPS: 0.261) – Fair value 5.99 (Fair Value Uncertainty: HIGH)
- R4Q (EPS: 0.26) – Fair value 5.97 (Fair Value Uncertainty: HIGH)
- FY15 (EPS: 0.269) – Fair value 6.16 (Fair Value Uncertainty: HIGH)
- FY16 (EPS: 0.28) – Fair value 6.43 (Fair Value Uncertainty: MEDIUM)
- EPS applied to reach the current stock price (6.01): 0.262
- 5Y DCF:
- The full scale modernised network has improved the network quality and customer experience scorecard.
- On this backdrop, data monetisation continues to be Digi’s trump card as shown in the strong data revenue growth.
- In this quarter, EBITDA margin fell to 43.3% from 44.5% q-o-q due to foreign exchange loss. Depreciation is higher too.
- Data traffic volume has increased to 19,900 terabytes (TB) against the previous years’ 9,900TB. With long-term evolution (LTE) network coverage rapidly expanding to more than 33% of the population, there will be increased data growth opportunity especially when the LTE network is now made available to prepaid subscribers.
- Potential upside is limited in the immediate term. As of now, valuation of DIGI is not attractive.
- On the other hand, if you looking for 4% dividend yield and very stable stock, you can consider DIGI.
Latest Financial – Q1 2015 Financial Report (27 Apr 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4717741
At the time of writing, I owned shares of DIGI.