Affin Hwang trims CelcomDigi earnings projection

KUALA LUMPUR: Affin Hwang Investment Bank has reduced its earnings projections for CelcomDigi due to one-time adjustments in the second quarter of 2026. The bank lowered its 2026-2028 forecast by 0.1 to 1 percent, partly offset by a smaller future loss from CelcomDigi's 33.3% stake in Digital Nasional Bhd. CelcomDigi's first-half 2026 profit fell 1% year-over-year to RM816 million, while service revenue rose 1.5% to RM5.43 billion.

The bank described the results as "mediocre," though they were largely in line with expectations. The decline was mainly due to RM43 million in settlement costs and stamp duties, along with higher 5G wholesale costs. These were partially offset by reduced staff and marketing expenses and lower provisions for doubtful debts. CelcomDigi declared a Q2 dividend of 3.4 sen per share, down 9.3% year-over-year, and its service revenue grew 1.2% quarter-over-quarter, driven by stronger contributions from wholesale, fiber, and enterprise segments.

Affin Hwang said CelcomDigi underperformed the FBM KLCI by 31% over the past year but deemed the stock attractive at 20 times its 2027 estimated price-to-earnings ratio. The bank maintained its Buy rating on CelcomDigi with an unchanged target price of RM3.40 based on discounted cash flow analysis.