Malaysia Industry Focus
Malaysia Telecom
Refer to important disclosures at the end of this report
DBS Group Research . Equity 12 Mar 2018
Cautious tone Industry service revenue fell by 1% in 2017 mainly due KLCI : 1,843.92
to weakness in prepaid segment Analyst TOH Woo Kim +60 32604 3917 Expect service revenue to either be flat or decline by a [email protected] a low single digit in 2018
Mobile operators are embarking on digitalisation and experimenting with digital MVNOs
Prefer fixed-line operators; TM is our only BUY call Ending 2017 on a good note. Total service revenue for the STOCKS mobile incumbents fell by 1.0% in 2017. This was solely 12-mth Price Mkt Cap Target Price Performance (%) attributed to DiGi (-5%) due to the sharp decline in its prepaid RM US$m RM 3 mth 12 mth Rating segment, while Maxis and Celcom were less affected and managed to record marginal growth of 0.8% and 0.5% Axiata Group 5.43 12,558 5.20 1.3 15.0 HOLD Digi.Com 4.75 9,439 4.20 1.7 (6.5) FULLY respectively. Continued SIM consolidation and prepaid-to- Maxis Bhd 5.92 11,818 5.35 (0.3) (7.5) VALUEDHOLD postpaid migration remain the key underlying trend for the Telekom Malaysia 5.66 5,436 7.10 (6.3) (9.9) BUY industry in 2017, leading to falling mobile penetration rate. TIME dotCom Bhd 8.30 1,233 8.60 (8.8) (3.5) HOLD Sources: AllianceDBS, Bloomberg Finance L.P. Flattish outlook for 2018. We expect industry service revenue Closing price as of 9 Mar 2018 to either be flat or decline by a low single digit in 2018 as voice and SMS continue to be cannibalised by rising adoption of data (~49% of revenue). The prepaid market should still be Axiata Group : Regional cellular operator challenging for DiGi given the headwinds in migrant workers Digi.Com : A Malaysia-focused cellular operator segment, while Maxis will suffer some revenue loss from the Maxis Bhd : Largest Malaysian cellular operator by subscribers termination of network-sharing agreement with U Mobile. Telekom Malaysia : Dominant fixed line operator in Malaysia Celcom will focus more on cost-optimisation initiatives in 2018 to TIME dotCom Bhd : A data-centric, fixed-line telecommunication improve its EBITDA margins which are below peers'. Lastly, we provider based in Malaysia serving enterprises and operators with expect the award of the 700MHz spectrum to be finalised in small presence in the retail broadband segment 2H18, with the three players getting equal share (2x10 MHz). Estimated subscriber market share in 2017
Incumbents are experimenting with digital MVNOs. All the Others/MVNOs three mobile incumbents have launched their respective digital 14% Maxis mobile services recently, but all these are operating separately as 24% MVNOs under different brands. This is perhaps to avoid cannibalising their existing subscriber bases and also to serve as U Mobile 12% ‘testing platforms’ to implement new innovative ideas. TM has also introduced a digital-driven prepaid mobile offering (called Unifi Mobile) where everything from SIM registration process to account management is done online via its mobile@unifi app. Celcom Domestic liquidity to support share price. Given the 22% DiGi relatively stable outlook and lower risks on spectrum in 2018, 28% we believe the share prices of Malaysian telcos will continue to be well supported by ample domestic liquidity, even though Sources: MCMC, Companies, AllianceDBS valuations are at a premium relative to regional peers. We prefer fixed-line operators due to their better growth prospects, with TM being our only BUY call. The current weakness in TM's share price, which could be due to uncertainties over GE14, offers a good opportunity to accumulate.
ed: TH / sa:BC, PY, CS
Industry Focus Malaysia Telecom
4Q17 results round-up EXHIBIT: Quarterly prepaid subscribers trend (in ‘000)
4Q17 results – ending FY17 on a good footing. 4Q17 results of 11,000 DiGi Maxis Celcom the Big 3 mobile incumbents were decent and in line with expectations. Overall, continued SIM consolidation and prepaid- 10,000 to-postpaid migration remained the key underlying trend for the 9,287 mobile industry in 2017, leading to falling mobile penetration 9,000 rate, a sluggish prepaid segment but offset by the growth in postpaid segment. 8,000
6,997 For fixed-line players, TIME reported stronger numbers due to a 7,000 strong recovery in its 4Q17 sales and lower taxation, while TM 6,724 results were inline. Subscribers net add for both players remains 6,000 robust given pent-up demand for high-speed fibre broadband. 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17
Sources: Companies DiGi suffered the most in 2017. Total service revenue for the mobile incumbents contracted by 1.0% in 2017, and this was Relying on postpaid growth. Overall, trends for the postpaid solely attributed to DiGi (-5% y-o-y) due to the sharp decline in segment were healthy with growing subscriber base (for Maxis its prepaid segment. Maxis outperformed both of its peers and DiGi) and/or higher ARPU (Celcom). Competition in postpaid (+0.8% y-o-y) as it managed to grow its premium postpaid had been rational in 2017, and a lot of the growth can be subscriber base to offset a weaker prepaid segment. After two attributed to the strong surge in data usage. DiGi was the key years of decline, Celcom finally recorded a slight growth of 0.5% beneficiary of the prepaid-to-postpaid migration wave as it offers y-o-y in 2017 as it focused on attracting and retaining high-ARPU entry-level plans at the sub RM50-60 range. On the other hand, subscribers. although their subscriber bases were rather flattish, Maxis and Celcom still managed to increase their ARPU respectively, thanks Mobile players' service revenue, 2017 vs. 2016 (in RM m) to their strong franchise in the business/enterprise segment as well as better network quality.
10,000 +0.8% 2016 2017 EXHIBIT: Quarterly postpaid subscriber trend (in ‘000) 9,000 8,455 8,525
8,000 (5.0%) 3,500 DiGi Maxis Celcom 7,000 0.5% 6,226 5,914 6,026 6,056 3,000 2,853 6,000 2,822 5,000 2,500
4,000 2,480 2,000 3,000 Maxis DiGi Celcom 1,500 Sources: Companies
1,000 Incumbent lost market share in prepaid. Collectively, the three 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 mobile incumbents lost about 2.7m prepaid subs in 2017 - 1.9m Sources: Companies subs from the overall decline in prepaid market size and 0.8m subscriber share lost to UMobile and MVNOs. DiGi remains the No.1 player for prepaid segment, far above peers in terms of number of subscribers. However, given the lower ARPU of its subscribers, DiGi's prepaid revenue base (RM933m) was just slightly above that of Maxis (RM904m) in 4Q17.
Page 2
Industry Focus Malaysia Telecom
Baseline pricing and data quota relatively stable internet passes (from 5GB to 6GB) and replaced the previous vanilla free data allocation (8GB Weekend and 1GB/1 hour Minor tweaks only. Baseline pricing and data quota for both everyday) to a new one that centres around social media and prepaid and postpaid plans stayed relatively unchanged in messaging apps data usage. 2017. But, from time to time, mobile operators did introduce new promotions or made minor adjustment to their plans, The new Hotlink FLEX Postpaid. Maxis also introduced a new especially for free data allocation and add-ons. entry-level postpaid plan using its Hotlink brand (see Exhibit below). We think this is primarily targeted at customers who In postpaid, recent changes made by Celcom and DiGi were have low data usage but want unlimited call and SMS. As a aimed at driving incremental ARPU increase with upgradeable matter of fact, at RM55 for 6GB data, there are better options options (AnydayGB and GBoost). Celcom takes it a notch out there (with unlimited calls) such as the Digi's RM58 higher by bundling the upgrade option for free (RM10/month) postpaid plan (5+5 GB data) or Maxis Hotlink's own prepaid if subscribers commit to a 12-month contract. internet passes (RM60 for 8GB data and free data for social media or messaging apps). In prepaid, tweaks were mainly done by Maxis to align its plans with peers. It slightly raised the base data quota for its RM35
EXHIBIT: Comparison of postpaid plans by mobile operators (as at 9 March 2018)
Ma xis Ce lc om DiGi U Mobile OnePlan 98/128/158 First Gold / Gold + Postpaid 80/110/150 P48/68 & Unlimited P99
Monthly c ommitme nt (RM) 98/128/158 80/98 80/110/150 48/68/99
Base data quota (GB) 15/40/50GB 10/20GB 10/25/Unlimited 5/15/Unlimited
Weekend - 10/20GB Weekend (4G) - 15GB for OnePlan Music streaming - Unlimited Free data (GB) Video Walla TM - 30/100GB (free Weekend 4G - 10/25 98 Video streaming - 5/7/Unlimited 12 months)
Ca ll & SMS Unlimited calls & SMS Unlimited calls Unlimited calls Unlimited calls
Re ma rks / Othe rs Free Yonder Music OnePlan 98 - upgradeable to AnydayGB - RM10/month to Postpaid 80/110 - upgradeable to Unlimited P99 - Free data roaming 30GB all-day data for combine weekend & weekday All-day Internet + Extra 10GB for of 3GB in 12 countries. 30GB limit RM10/month data (free with 12-month RM10/month for Hotspot contract)
Sources: Companies, AllianceDBS
EXHIBIT: Comparison of monthly internet passes and prepaid plans by mobile operators (as at 9 March 2018)
Ma xis Ce lc om DiGi U Mobile Hotlink RED All-New Xpax Prepaid LiVE Unlimited Power Prepaid
Monthly internet passes (RM) 35/45 30/50 30/38/48 20/30/50
Base data quota (GB) 6/8GB 5/10GB 5/8/10GB 1.5/7.5*/12*GB
FREE 10GB of Instagram & Facebook Xpax 50 - FREE Unlimited Music FREE Data for messaging apps OR 500MB daily quota for Facebook, Music streaming - Unlimited Free data (GB) Walla tm social media Twitter, & Instagram Video streaming - 0.5/2.5/10GB Promo till 30 Apr - Bonus 10/20 GB data for first 3 days
LiVE - FREE monthly 10GB of Video + FREE unlimited data for Facebook, FREE 10GB of Facebook and 500MB FREE 10GB of Basic Internet & Music streaming quota. FREE 1000 Prepaid plan unique features Instagram, & Twitter Basic Internet Facebook mins of Call and SMS to 6 DiGi FREE 1GB basic Internet every month numbers
Sources: Companies, AllianceDBS
Page 3
Industry Focus Malaysia Telecom
EXHIBIT: Maxis Hotlink Postpaid FLEX
Source: Hotlink
Embracing digitalisation Yoodo by Celcom Axiata – fully customisable plan. Yoodo offers a fully customisable mobile plan where subscribers can TM introduces Unifi Mobile. TM recently launched its re- determine the amount of data, call mins and SMS that they branded mobile business at the start of the year. Called Unifi need. Account management and changes to the plan can be Mobile, it is a digital-driven prepaid mobile offering where made conveniently via a simple app. Subscribers are charged everything from SIM registration process to account upfront and payment is made through a registered credit or management is done online via TM mobile@unifi app (See debit card. At first glance, we think Yoodo's rates are not Appendix for further details). competitive enough to match the generous free data allocation by most existing prepaid plans. The key proposition for Unifi Mobile is that there is no expiry for the prepaid credit, data quota, call mins and SMS as long Ookyo by Maxis – unlimited data for apps. Ookyo plan shares a as the line remains active (90-day grace period of inactivity). lot of similarities and we think it could have inspired the recent This is in contrast with existing prepaid plans in the market, changes to Hotlink Prepaid and Hotlink Postpaid FLEX. For where unutilised data quota, call mins and SMS will expire RM30/month, Ookyo offers 4GB of base data, free data for after a period of time and are not carried forward. Validity is chatting apps, and a choice of unlimited internet for apps in also longer for Unifi Mobile (90 days from last reload or add- either the Social Pack (Facebook, Instagram, etc.) or on purchase, regardless of amount) compared to the typical 1 Entertainment Pack (Spotify, Joox, etc.). Subscribers can also day of validity per RM1 reload practiced by the other mobile purchase individual add-ons which provide unlimited internet operators. access for other apps such as YouTube and various popular mobile games. Incumbents are experimenting via MVNOs. All the three mobile incumbents had also launched their respective digital mobile tapp by DiGi – unused data and call mins are sold back in services recently, but all these are under different brands and exchange for credit. tapp is also a fully customisable digital operate separately as mobile virtual network operators prepaid service by DiGi that is more flexible and has an (MVNOs). This is perhaps to avoid cannibalising their existing interesting sell-back feature. Users determine the price they subscriber bases and also to serve as ‘testing platforms’ to want to pay and validity period (up to 30 days), and the system implement innovative ideas. We summarise the key unique will allocate the maximum amount of data or call mins, which features of each of the digital MVNOs, with further details can be mixed and modified at any point of time. Any unused appended in the Appendix. data and call mins are automatically sold back and exchanged for tapp credit at 65% of the original value.
Page 4
Industry Focus Malaysia Telecom
line operators due to their better growth prospects, with TM Stock Recommendations being our only BUY call. The current weakness in TM's share price, which could be due to uncertainties over GE14, offers a 2018 outlook. Based on the guidance by mobile operators, we good opportunity to accumulate. expect industry service revenue to either be flat or decline by a low single digit in 2018 as voice and SMS continued to be Decent dividend yield. Domestic-focused operators such as cannibalised by rising adoption of data (~49% of revenue in DiGi and Maxis are trading at around 11.6-13.3x CY18 4Q17). The prepaid market should still be challenging for DiGi EV/EBITDA, a premium relative to the regional average of 7.8x. given the headwinds in migrant workers segment, while Maxis Given the ample domestic liquidity, we believe the premium will suffer some revenue loss from the complete termination of valuations can be sustained as long as dividend yields remain network-sharing agreement with U Mobile by the end of the decent and backed by strong free cashflow generation. year. Celcom will focus more on cost-optimisation initiatives in 2018 in order to improve its EBITDA margin which is below TM (BUY, TP: RM7.10). We remain optimistic that the rollout peers'. Lastly, we expect the award of the 700MHz spectrum of the High-Speed Broadband Phase 2 (HSBB2) project, Sub to be announced in 2H18, with the three mobile incumbents Urban Broadband (SUBB) project, and Unifi Mobile services getting equal share (2x10 MHz). (previously webe) would drive the long-term growth for TM, as the company expands the coverage of its high-speed Domestic liquidity to support share price. Given the stable broadband network to more areas. Our TP implies 7.7x FY18 outlook and lower risks on spectrum in 2018, we believe the EV/EBITDA and 26.7x FY18 PE. share prices of Malaysian telcos will continue to be well . supported by ample domestic liquidity, even though valuations are at a premium relative to regional peers. We prefer fixed-
EXHIBIT: Peer comparison table
Current Market Target P/E Divd yield Price/ BVPS EV/EBITDA Net Debt/EBITDA Call LC Price Price Cap LC USD CY18 CY19 CY18 CY19 CY18 CY19 CY18 CY19 CY18 CY19 Axiata HOLD MYR 5.20 5.43 12,554 33.2x 29.7x 2.0% 2.5% 1.9x 1.9x 7.1x 6.6x 1.3x 1.0x Maxis HOLD MYR 5.35 5.89 11,755 22.3x 20.8x 3.4% 4.1% 6.1x 5.8x 11.6x 11.6x 1.5x 1.4x DiGi FULLY VALUED MYR 4.20 4.72 9,377 24.4x 24.3x 4.1% 4.1% 70.7x 70.7x 13.3x 13.1x 0.7x 0.7x TM BUY MYR 7.10 5.63 5,406 22.2x 18.4x 4.1% 4.9% 2.7x 2.6x 6.5x 6.2x 1.3x 1.2x TIME HOLD MYR 8.60 8.22 1,221 21.2x 18.4x 1.2% 1.4% 1.9x 1.8x 12.3x 10.8x nm nm
Singtel BUY SGD 4.30 3.35 41,519 12.4x 0.0x 5.9% 0.0% 1.8x 0.0x 7.8x 0.0x 1.2x #DIV/0! Starhub FULLY VALUED SGD 2.20 2.45 3,216 18.1x 19.9x 6.5% 5.7% 42.9x 60.3x 9.0x 8.9x 1.6x 1.6x M1 FULLY VALUED SGD 1.49 1.78 1,250 14.7x 16.7x 5.5% 4.8% 3.8x 3.7x 7.4x 7.6x 1.9x 1.8x
PT Telekom HOLD IDR 4200 4140 30,231 16.1x 15.5x 4.3% 4.5% 4.5x 4.4x 6.5x 6.3x nm nm XL Axiata BUY IDR 3900 2720 2,106 21.5x 21.4x 2.8% 2.8% 1.3x 1.2x 4.2x 3.6x 1.1x 0.9x Indosat HOLD IDR 6800 5550 2,185 26.5x 30.5x 0.0% 3.3% 1.9x 1.9x 3.5x 3.3x 1.1x 0.9x
Advance Info Service BUY THB 218.00 201.00 19,045 17.7x 16.6x 4.0% 4.2% 9.7x 8.1x 9.2x 8.3x 1.5x 1.3x Total Access Comm FULLY VALUED THB 44.30 45.75 3,452 97.6x 24.8x 0.0% 2.0% 3.5x 3.2x 5.7x 5.9x 1.4x 1.5x
Average 19.2x 13.6x 4.1% 2.7% 8.9x 8.5x 7.8x 5.4x 1.0x 0.5x Source: AllianceDBS
Page 5
Industry Focus Malaysia Telecom
Appendix
EXHIBIT: TM Unifi digital mobile prepaid plan
Source: Unifi mobile
EXHIBIT: Yoodo by Celcom Axiata
Source: Yoodo
Page 6
Industry Focus Malaysia Telecom
EXHIBIT: Ookyo by Maxis
Source: Ookyo
EXHIBIT: tapp by DiGi
Source: tapp
Page 7
Industry Focus Malaysia Telecom
AllianceDBS recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends
Completed Date: 12 Mar 2018 08:05:24 (MYT) Dissemination Date: 12 Mar 2018 08:07:18 (MYT)
Sources for all charts and tables are AllianceDBS unless otherwise specified.
GENERAL DISCLOSURE/DISCLAIMER This report is prepared by AllianceDBS Research Sdn Bhd (''AllianceDBS''). This report is solely intended for the clients of DBS Bank Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of AllianceDBS Research Sdn Bhd (''AllianceDBS'').
The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.
Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report.
This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer.
The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:
(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.
Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.
Page 8
Industry Focus Malaysia Telecom
DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.
ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or 2 his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), DBSV HK or their subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of 28 Feb 2018. 2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.
1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.
Page 9
Industry Focus Malaysia Telecom
RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946.
DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. DBSVS is regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws.
Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.
Hong Kong This report has been prepared by an entity(ies) which is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers Hong Kong Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.
Page 10
Industry Focus Malaysia Telecom
United This report is produced by AllianceDBS Research Sdn Bhd which is regulated by the Securities Commission Malaysia. Kingdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.
Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, International Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Financial Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for Centre professional clients (as defined in the DFSA rulebook) and no other person may act upon it.
United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.
United States This report was prepared by AllianceDBS Research Sdn Bhd (''AllianceDBS''). DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
Page 11
Industry Focus Malaysia Telecom
DBS Regional Research Offices
HONG KONG MALAYSIA SINGAPORE DBS Vickers (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Paul Yong Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 18th Floor Man Yee Building 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 68 Des Voeux Road Central Capital Square, Marina Bay Financial Centre Tower 3 Central, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 65 6878 8888 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 65 65353 418 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] Participant of the Stock Exchange of Hong Kong e-mail: [email protected] Company Regn. No. 196800306E
INDONESIA THAILAND PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand
Page 12