Axiata - Q2 earnings up but i am not impressed

Written on August 27, 2009 – 7:44 am | by Kampung Boy |

Axiata Group Berhad (6888) the company that is incharged of Celcom in Malaysia posted a positive Q2 financial results. Axiata recorded a profit of RM526.84 million and a 6.00 earnings per share.

The price of Axiata has risen steadily from RM 2.10+ to the current price of RM 3.00+ after the bonus issue. It’s also one of the darlings of EPF as they have been buying on Axiata on large volume of late.

Personally, Axiata is a solid company as most of their performances come from Celcom. At current price, it does not excite me at all to invest in it.

Kampung Investor’s verdict

Axiata have a 6.00 sen Q2 eps and a 3.00 sen Q1 eps for year 2009. This makes Axiata with a 9.00 sen eps accumulated for 2009. With a projection of 18.00 eps for all 4 quarters, the Per Earning Ratio (PE) is very high.

Curent EPS = Q1 + Q2
= 3.00 + 6.00 = 9.00 sen

Projection EPS for 2009 = 9.00 x 2 = 18.00

The future EPS is just a rough estimation i use to calculate the PE of a stock.

Current price of Axiata = RM 3.11 (August 27, 2009)

PE = Price of a stock/EPS
= 311/18
= 17.28

Usually i will only invest in stocks that has a PE lower then 10 but it all depends on the industries the stock is in. Some industries has higher average PE but to be on the safer side, I usually choose stock with PE lower then 10. At current level, Axiata with a PE of 17.28 does not excite me at all.

* Low PE does not guarantee profit. Take note!

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