THE lower revenue and profit posted by Digi.com Bhd for the second quarter of 2020 (2Q20) was mostly within analyst expectations, as the dip is attributed to the movement control order (MCO), as well as a one-off spike in net finance.
“2Q20’s net profit fell 13.2% to RM288 mil on lower service revenue mainly due to the imposition of the MCO as the slowdown in economic activity, limited accessibility to physical touchpoints, and travel restrictions affected data and voice monetisation, subscriber acquisition activities, and roaming revenues,” said TA Securities analyst Wilson Foo.
The closure of physical stores, involuntary churn, and continued sim consolidation has also seen Digi’s subscriber base reduced to 10.6 million, according to MIDF Research analyst Martin Foo.
“However, the blended average revenue per user (ARPU) remained stagnant at RM40 per month, supported by a higher proportion of postpaid subscribers of 28.5%,” he said.
TA Securities, MIDF Research, AmInvestment Bank, Affin Hwang Capital, and JF Apex Securities all maintained a hold or neutral call on Digi.
TA Securities also maintained a target price of RM4.50, as did Affin Hwang Capital, which held its target price of RM4.60. JF Apex Securities also maintained a target price of RM4.75.
However, MIDF Research and AmInvestment both lowered their target price and fair value to RM3.95 from a previous RM4.30, and RM4.40 from a previous RM4.55 respectively.
At 4.18pm, Digi’s shares were last done at RM4.38, up 5 sen, with 2.66 million shares traded. – July 15, 2020
