MOF Inc’s exit from DNB confirms impending downside risk to financial year 2026 estimate (FY26E) arnings of its telco shareholders.
“Telcos would have to further optimise costs to offset in our view. We maintain our NEUTRAL stance on the sector,” said Maybank Investment Bank (MIB).
MIB notes the fixed-line players are largely unaffected by DNB shareholding developments. Their preferred pick is TM for its exposure to the data centre theme along with potential upside to dividends.
Both CelcomDigi and Maxis announced they have completed the put option exercise by MOF Inc on 6 Mar 2026. Each telco has paid MYR327.9 mil for its agreed proportion of MoF Inc’s ordinary shares, remaining MoF Inc. loan in DNB (with accrued interest) and additional shareholder advances in DNB.
Recall YTL Power had earlier completed the exercise on 4 Feb 2026. With the completion of the put exercise, DNB is now a 33.3% associate of CelcomDigi, Maxis and YTL Power.
With DNB now an associate, each of the 3 telco shareholders will have to equity-account DNB’s losses from quarter one 2026 (1Q26).
Recall DNB incurred a net loss of MYR1.2 bil in FY24 as telcos paid nominal access fees. When the required conditions are fulfilled, the minimum annual fee could rise to MYR360 mil for Maxis, and MYR288 mil per telco for each of the other telcos, which would theoretically help reduce DNB’s losses.
Meanwhile, clarity is pending on TM’s proposed switch of 5G access to UMobile, with DNB having not accepted TM’s notice to terminate the original access agreement.
“We have not yet incorporated the impending equity-accounting of DNB’s losses into our forecasts, pending further guidance on prevailing losses run-rate,” said MIB.
Hypothetically, MIB estimates an annual net loss of MYR500 mil by DNB would erode FY26E net profit of CelcomDigi and Maxis by 10% each.
In terms of dividends, MIB believes Maxis would maintain a 4sen DPS per quarter, while CelcomDigi maintains a 100% payout due to a lack of retained earnings.
“Meanwhile, we expect TM and TIME to sustain elevated payouts in FY26E from more proactive capital management,” said MIB. —Mar 9, 2026
Main image: Chandrawat & Partners
