Sector : Telecommunication
& Media
Sub
Sector :
Telecommunication Service Providers
As of 11 April 2020 there are 5 company listed in
Bursa Main Market and ACE market which are doing business in mobile services in
Malaysia. They are:
There is a private company provide mobile service in
Malaysia which is U Mobile Sdn Bhd which is not in this comparison. According
to The Star it
target USD 500 million IPO as early as
end of this year.
Competitiveness
Market shares is
an importance indicator to determine the competitiveness of the company. Total revenue
make from mobiles services in Malaysia for the year 2018 is RM 23,358,664,724.
COMPANY
|
REVENUE (MOBILE
SERVICES (MALAYSIA)) 2018 (RM)
|
MARKET SHARE
(%)
|
7,339,023,000
|
31.42
|
|
6,527,111,000
|
27.94
|
|
9,192,436,000
|
39.35
|
|
112,552,000
|
0.48
|
|
187,542,724
|
0.80
|
There are three mobile companies dominated the
mobile service market in Malaysia which are MAXIS (39.35 %), AXIATA (31.42%)
and DIGI (27.94%). Total market share of these three company make out of 98.71
% of the total market share.
Operational
For operational, operating income of the companies had been review. Operating
income determine how much the companies’ revenue had turn into profit after
reduction cost of operating expense.
Besides operating income, operating margin ratio is
also calculated. Companies with higher operating margin ratio have more
probability to survive in today financial crisis. The median operating margin
ratio for this group of companies for 2018 is 25.97.
COMPANY
|
2018 OPERATING
INCOME (RM)
|
2018 OPERATING
MARGIN RATIO
|
1,906,000,000
|
25.97
|
|
2,209,426,000
|
33.85
|
|
2,757,776,000
|
30.00
|
|
21,876,000
|
19.44
|
|
-11,518,832
|
-6.14
|
As value investor, company with negative operating
income would be disqualified for the evaluation hence XOX would be
disqualified. Besides that, REDTONE would be disqualified as well because it
had negative operating income in year 2016.
From the table above DIGI is the top company in term
of operational as t had highest operating margin ratio of 33.85.
Sustainability
For the sustainability of the business, debt of the
companies is being review. There are two criteria to look at interest coverage ratio,
which is used to determine how easy the companies able to pay off the interest
of outstanding debt and debt ratio.
Mobile
services is a high debt services the median debt ratio for 2018 is 0.64.
COMPANY
|
2018 INTEREST
COVERAGE RATIO
|
2018 DEBT
RATIO
|
9.29
|
0.64
|
|
17.00
|
0.89
|
|
7.09
|
0.64
|
|
10.36
|
0.32
|
|
-95.84
|
0.34
|
In this category REDTONE had standout with high
interest coverage ratio and low debt ratio compare to the other competitor.
Summary
In summary a point is given to each company to evaluate
each company competitiveness, operational and sustainability. Points given are as
follows:
Competitiveness
Criteria
|
Point
|
Greater
than 30 % Market Shares
|
5
|
20.01
% - 30.00 % Market shares
|
4
|
10.01
% - 20.00 % Market shares
|
3
|
5.01
% - 10.00 % Market shares
|
2
|
1.00
% - 5.00 % Market shares
|
1
|
Less
than 1%
|
0
|
Operational
Criteria
|
Point
|
Greater
than 35 Operating Margin
|
5
|
30.01
– 35.00 Operating Margin
|
4
|
20.01
– 30.00 Operating Margin
|
3
|
10.01
- 20.00 Operating Margin
|
2
|
1.01
- 10.00 Operating Margin
|
1
|
0.00
– 1.00 Operating Margin
|
0
|
Less
than 0
|
Disqualified
|
Sustainability
Criteria
|
Point
|
No
Financial Cost
|
2
|
Greater
than 10 Interest Coverage Ratio
|
1
|
Less
than 10 Interest Coverage Ratio
|
0
|
Criteria
|
Point
|
Less
than 0.40
|
3
|
0.40
– 0.65
|
2
|
0.65
– 0.80
|
1
|
Greater
than 0.80
|
0
|
COMPANY
|
Competitive
|
Operational
|
Sustainability
|
Total
|
5
|
3
|
2
|
10
|
|
4
|
4
|
1
|
9
|
|
5
|
4
|
2
|
11
|
|
0
|
DIS
|
4
|
DIS
|
|
0
|
DIS
|
3
|
DIS
|
From the evaluation above, MAXIS (11 points) and
AXIATA (10 points) are qualified for further analysis.
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