Company Coverage
Axiata Group (AXIATA MK): 2Q26: In Line; Partial Monetisation Of Edotco Remains A Key Catalyst
BUY (Maintained)
Current price:
Target price:
Upside:
RM1.82
RM2.50
+37.4%
Analyst
Highlights
Axiata recorded a weak 2Q26 net profit of RM42.5m (-84% yoy; -85% qoq) attributed to lower ringgit translated earnings, elevated withholding tax expense, and an increase in interest and depreciation expenses.
Axiata declared a 5.5 sen interim DPS and remains on track to deliver 11 sen net DPS in 2026. Net debt/EBITDA expanded to 2.63x in 2Q26 (1Q26: 2.51x).
Maintain BUY with an SOTP-based target price of RM2.50. At its current valuation, the stock offers an attractive dividend yield of 6% for 2026.
Analysis
2Q26: In line. Axiata Group (Axiata) reported a 2Q26 net profit of RM42.5m (-84% yoy; -85% qoq). The weaker quarter was due to: a) RM43m forex loss on financing activity; b) lower ringgit translated earnings due to the ringgit strengthening; c) elevated withholding tax (~RM50m) vs a one-off tax credit in 1Q26 (~RM12m); and d) higher depreciation expenses. Qoq revenue growth was supported by healthy performance across all OpCos and associates. 1H26 net profit of RM316.3m (-27% yoy) represents 51% and 47% of house and consensus full-year forecasts respectively.
Highlights
Axiata recorded a weak 2Q26 net profit of RM42.5m (-84% yoy; -85% qoq) attributed to lower ringgit translated earnings, elevated withholding tax expense, and an increase in interest and depreciation expenses.
Axiata declared a 5.5 sen interim DPS and remains on track to deliver 11 sen net DPS in 2026. Net debt/EBITDA expanded to 2.63x in 2Q26 (1Q26: 2.51x).
Maintain BUY with an SOTP-based target price of RM2.50. At its current valuation, the stock offers an attractive dividend yield of 6% for 2026.
Analysis
2Q26: In line. Axiata Group (Axiata) reported a 2Q26 net profit of RM42.5m (-84% yoy; -85% qoq). The weaker quarter was due to: a) RM43m forex loss on financing activity; b) lower ringgit translated earnings due to the ringgit strengthening; c) elevated withholding tax (~RM50m) vs a one-off tax credit in 1Q26 (~RM12m); and d) higher depreciation expenses. Qoq revenue growth was supported by healthy performance across all OpCos and associates. 1H26 net profit of RM316.3m (-27% yoy) represents 51% and 47% of house and consensus full-year forecasts respectively.
BUY (Maintained)
Current price:
Target price:
Upside:
RM1.82
RM2.50
+37.4%
Analyst
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