Friday, November 16, 2012

Telco: The signs of times to come

After reading through SingTel's results, I have a feeling that our local telcos will face the same predicament. Revenue for SingTel from the more developed mature market such as Australia and Singapore continue to face growth pressure, while India remains very competitive. Telcos will find more opportunities from Indonesia.

Click to enlarge
As you can see above, among the big 3 mobile players in Malaysia, total revenue seems to be stagnating with a CQGR growing at 1.1% from 30 Sep 2009 to 30 June 2012. It also seems that the larger telcos are getting squeezed in terms of revenue as the product becomes more and more commoditized. It happens in Japan (with Softbank's ability to get a big chunk of revenue from especially NTT and KDDI). It happens in Malaysia with Digi.

In terms of stocks, both Maxis Mobile and Digi only have operations in Malaysia while Axiata has better exposure with more potential. I feel that with the exception of Axiata which is potentially still a stock with some decent growth, Digi and Maxis will just be a dividend stock.

6 comments:

felicity said...

seriously I have not looked at it but from what I hear from you, it really looks like Malaysian stocks are expensive

Benson said...

Will u consider telco stocks like singtel as valuation seem ok compare to malaysian telcos, (p/e reasonable, divident around 5%),will u think it is an opportunity to buy as price dropping, let said around $3? Thx.

Benson said...

Ya, valuation is high for malaysian telcos, can refer report by CIMB,

https://cimbequityresearch.cimb.com/EFAOnTheWeb/EFAWebAPI/GetDocPDF.asp?DocGUID=64B7EB13-AEDE-48BD-B950-82F101A3CD6E&A=CIMB

felicity said...

I as this stage will want to look at growth opportunities besides dividend, hence your palm stocks, gloves etc are more of my preference.

Benson said...

Ya,most palm stocks are under pressure now, hope can choose best palm stocks.

山下聖人 said...

P/E for the whole KLCI is too high now for me, especially Telco stocks, plantations.