AXXTF - Axiata Group: Valuation Re-Rating Dependent On Other Catalysts With Proposed Merger Being Called Off
Elevator Pitch
Malaysia-listed telecommunications company Axiata Group Berhad (AXXTF) [AXIATA:MK] is currently trading at 5.7 times consensus forward FY2019 EV/EBITDA, representing a discount to the stock's historical five-year forward EV/EBITDA of approximately 7 times. The stock also offers a trailing dividend yield of 2.2%.
With a proposed mega-merger which promised synergies between RM12 billion and RM15 billion (equivalent to 30-37% of the stock's market capitalization) being called off, Axiata Group has to rely on other catalysts to re-rate its valuations. These include mergers or industry consolidation opportunities in and outside of Malaysia and