UOB Kay Hian
Date of Report: Friday, 22 August 2025
Maxis Berhad Delivers Robust 2Q25 Results: Strong Cost Discipline, Solid Growth, and Attractive Dividend Yield
Overview: Maxis Bhd’s Strong Quarter Reinforces Buy Rating
Maxis Berhad, a leading Malaysian mobile operator offering 4G and 5G services, reported a robust second quarter for 2025, showcasing resilient earnings growth, exceptional cost management, and a compelling dividend yield. UOB Kay Hian maintains its BUY rating with a DCF-based target price of RM4.20, highlighting significant upside potential for investors. The company’s continued focus on operational efficiency, strategic product offerings, ESG initiatives, and enterprise expansion have positioned it for sustainable, long-term growth.
Key Investment Highlights
- 2Q25 Net Profit: RM398 million (+11.8% YoY, +7.3% QoQ)
- 1H25 Net Profit: RM769 million (+9% YoY), in line with expectations
- Dividend: Second interim net dividend per share (DPS) of 4 sen (79% payout rate); projected full-year DPS of 17.6 sen/share (4.9% yield)
- Target Price: RM4.20 (22.1% upside from current price of RM3.44)
- Valuation: 8.5x EV/EBITDA, -1SD below mean; attractive 5% dividend yield
Financial Performance: Solid Growth Driven by Cost Discipline
Maxis delivered another solid quarter, with net profit rising to RM398 million in 2Q25, primarily driven by strict cost control, lower device expenses, and stable service revenue. The net profit margin improved to 15.5% versus 13.8% in 2Q24. Cost efficiencies were evident across all major expense categories.
| Metric |
2Q25 |
1Q25 |
2Q24 |
YoY Change |
QoQ Change |
| Revenue (RMm) |
2,562 |
2,608 |
2,585 |
-0.9% |
-1.8% |
| Reported EBITDA (RMm) |
1,094 |
1,055 |
1,046 |
+4.6% |
+3.7% |
| Net Profit (RMm) |
398 |
371 |
356 |
+11.8% |
+7.3% |
| EPS (sen) |
5.1 |
4.7 |
4.6 |
+10.9% |
+8.5% |
Cost Structure Breakdown
Maxis’ cost structure improvements were notable, especially in traffic, commissions, and direct costs, which declined sharply as a percentage of revenue.
| Cost Category (% of Revenue) |
2Q24 |
3Q24 |
4Q24 |
1Q25 |
2Q25 |
| Traffic, Commissions & Direct Costs |
44.9% |
43.9% |
52.5% |
46.6% |
41.5% |
| Network & Spectrum |
9.1% |
9.5% |
10.1% |
9.6% |
9.7% |
| Resource |
9.4% |
9.2% |
10.0% |
9.2% |
9.5% |
| O&M |
4.9% |
5.8% |
5.5% |
4.7% |
5.0% |
| Marketing |
2.1% |
1.9% |
2.1% |
1.9% |
1.9% |
Segment Analysis: Postpaid, Prepaid, and Enterprise Momentum
Postpaid:
Revenue rose to RM933m (+2% YoY, +1% QoQ), buoyed by strong subscriber growth and enhanced data plan offerings.
Net addition of 58,000 postpaid subscribers in the quarter.
ARPU slipped to RM71.30/month (from RM71.80 in 1Q25) due to revised revenue recognition in the SafeDevice program.
Prepaid:
Revenue fell 6% YoY but improved 3% QoQ to RM610m.
ARPU was RM35.30/month (-5% YoY, +3% QoQ).
Strategy focused on personalized packages for value-driven consumers and tourists, supporting quarterly growth.
Consumer Home (Fibre & Solar):
Segment revenue grew 1% YoY to RM254m, flat QoQ.
Subscribers increased 1% to 788,000.
ARPU nudged up to RM111.20/month.
Enterprise:
Revenue advanced 2% YoY and 2% QoQ to RM407m.
Growth driven by mobile and wholesale subscriptions, with strong demand from SMEs and the public sector.
The segment benefits from Maxis’ digital transformation capabilities and integrated value-added solutions.
Strategic Initiatives and Partnerships
CMLink Launch with China Mobile International:
Maxis partnered with CMI to introduce CMLink, an MVNO business targeting Chinese students, professionals, and visitors.
Features include 1CMN (one card, multiple numbers) for seamless cross-border connectivity and data sharing.
Financial Outlook, Guidance, and Valuation
No change to earnings guidance for FY25.
Capex for FY25 is revised to around RM1b, mainly for fibre infrastructure and enterprise expansion.
The stock trades at 8.5x EV/EBITDA, significantly below its historical mean of 10.4x.
Dividend yield remains attractive at 5%.
Key Financials and Outlook
| Year (RMm) |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
10,536 |
10,860 |
11,542 |
12,171 |
| EBITDA |
4,122 |
4,244 |
4,499 |
4,620 |
| Net Profit (Adj.) |
1,396 |
1,501 |
1,603 |
1,712 |
| EPS (sen) |
17.8 |
19.2 |
20.5 |
21.9 |
| PE (x) |
19.3 |
18.7 |
17.5 |
16.4 |
| Dividend Yield (%) |
4.9 |
4.9 |
5.2 |
5.2 |
| ROE (%) |
23.6 |
24.9 |
26.0 |
26.7 |
ESG Initiatives: Sustainability and Community Focus
Environmental:
- Achieved a 78% recycling rate on total waste generated.
- Network waste recycling at 88%, marketing material at 26%, office waste at 12%.
Social:
- eKelas® Usahawan program benefitted 4,483 entrepreneurs and micro-SMEs, focusing on digital marketing and underserved areas.
- 3,440 hours of employee volunteering; RM2.2m in humanitarian relief for natural disasters in 2024.
Governance:
- Strong transparency practices, anti-bribery and anti-corruption policies in place.
Key Assumptions for 2025–2027
| Assumption |
2025F |
2026F |
2027F |
| Revenue Growth (%) |
3.1 |
6.3 |
5.4 |
| EBITDA Margin (%) |
39.1 |
39.0 |
38.0 |
| Capex to Revenue (%) |
10.0 |
11.0 |
14.5 |
| Mobile Subs (m) |
11.0 |
11.4 |
11.8 |
Conclusion: Maxis Remains a Top Pick for Yield and Growth
Maxis Berhad’s 2Q25 results reinforce its position as a leader in Malaysia’s telecom sector, with strong profitability, prudent cost management, and a consistent dividend policy. The company’s strategic focus on enterprise, digital transformation, and ESG credentials further strengthens its long-term investment appeal. With an attractive valuation and healthy dividend yield, Maxis is well-positioned for growth and remains a compelling BUY for investors seeking both income and capital appreciation in the regional telecom space.
