MMNOs face DNB accounting test in Q4
KUALA LUMPUR: Malaysia’s transition to a 5G dual network model is entering a critical phase, with mobile network operators (MNO) set to begin equity accounting for Digital Nasional Bhd’s (DNB) financials in the fourth quarter (Q4) of financial year 2026 (FY26).
Malaysia's shift to a 5G dual-network model is reaching a crucial stage, with telecommunications companies facing an accounting test as they begin to account for Digital Nasional Bhd's (DNB) financials in the fourth quarter of 2026. This change could offer MNO shareholders a clearer picture of DNB's financial and operational performance, potentially influencing dividend outlooks, according to Kenanga Research.
CelcomDigi Bhd, Maxis Bhd, and YTL Power International Bhd each own a 33.3% stake in DNB, with the equity accounting treatment set to kick in Q4. Kenanga Research suggests that CelcomDigi's current trading price is below its historical average, providing better downside protection. The firm considers CelcomDigi the preferred MNO investment over Maxis, citing a more favorable risk-reward ratio.
In their bear and bull scenarios, CelcomDigi offers a 37% upside and 26% downside, while Maxis presents a 21% upside and 20% downside.
Maxis, however, boasts a stronger earnings track record, which has helped reverse consensus earnings downgrades since early 2025. As MNOs increasingly rely on 5G dual-network developments, earnings delivery is expected to play a pivotal role in shaping share price performance moving forward. Kenanga Research anticipates CelcomDigi's earnings to improve in the near term, as post-merger synergies are yet to be fully realized and could trigger a reversal in consensus earnings downgrades, supporting valuation multiples recovery.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
