INTRODUCTION
Merged in 1976 and enumerated in 2005, Bursa Malaysia is an exchange holding company in
Malaysia. It is also one of the leading bourses in ASEAN. Bursa Malaysia helps across 50
economic activities over 900 companies to raise capital– whether through the LEAP Market
for up-and-coming SME companies, the Main Market for established large-cap companies or
the ACE Market for emerging companies of all sizes. There are several criteria to be listed in
BURSA Malaysia. Based on the criteria met the company will be listed accordingly to the
sector. One of the sectors that are available in BURSA Malaysia is telecommunications and
media sector. MAXIS and DIGI is among one of the listed companied in BURSA Malaysia.
DIGI
Name Digi.Com Berhad
Ticker DIGI
Exchange KLSE
Founded 1994
Industry Wireless Telecommunication Services
Sector Telecom
Market Cap RM28.379b
Shares outstanding 7.78b
Digi Telecommunications or Digi.Com Berhad is a mobile service provider in Malaysia. It is
one of the major shareholder with 49% in Telenor ASA of Norway. Digi became the first
telco in Malaysia On 24 May 1995, to unveil and run a fully digital cellular network. GPRS
(2.5G) was also first to offer by DIGI and later EDGE (2.75G) in Malaysia on 14 May 2004.
1800 MHz band is primarily used by DIGI, for GSM with the network code of 502-16. 2G
EDGE, 3G UMTS, 3G HSPA, 3G HSPA+, 4G LTE and 4G LTE-A are the networks oerated
by DIGI. As of December 2017, Digi has 4G LTE coverage of 90% on populated areas, LTE-
Advanced (LTE-A) population coverage was at 70% nationwide, likely measured at the
lowest signal quality at -110dBm. Digi Telecommunications Sdn. Bhd. offers a diversity of
mobile communication services. These services comprise voice under their postpaid plans &
prepaid plans, data plans and services, SMS, international roaming, international calling card
and WAP services. Digi is the second operator in Malaysia to introduce VoLTE, primarily
accessible to iPhones running iOS 10.1 and above.
MAXIS
Name Maxis Berhad
Ticker MAXIS
Exchange KLSE
Founded 1995
Industry Wireless Telecommunication Services
Sector: Telecom Market
Cap: RM35.438b
Shares outstanding: 7.82b
Maxis Communications or Maxis Berhad is a communications service provider in Malaysia.
MAXIS headquarters is locate in Kuala Lumpur, Malaysia. It offers a different kind of
applications, communication products, and value added services for customers, small &
medium business owners, and large enterprises. Maxis uses the dialling prefixes of "011
12000000 through 12499999", "012", "014-2", and "017". The preponderance of the
company's stake is possessed by Tan Sri Ananda Krishnan. Maxis introduced the prepaid
brand "Hotlink" on 19 October 1999. Besides, Maxis acquired TimeCel, a rival mobile
service provider in 2002, from TimedotCom Berhad. Prior to the acquisition, Maxis offered
preface number start with 012, and TimeCel 017.
An offer was made to buy out Maxis On 27 April 2007, and privatise the company in view
for expansions into the Indian, Indonesian and Qatari markets. The contract was offered by
Tan Sri Ananda Krishnan, who pledged Maxis RM17.46 billion (US$5.1 billion) in exchange
for all remaining shares of the corporation. The agreement is to be officially made by Usaha
Tegas, a business possessed by Krishnan, on 3 May 2007, while the Kuala Lumpur Stock
Exchange appends exchange of the company's shares until 3 May.
Underneath the influence of the previous Prime Minister Datuk Seri Najib Tun Razak, Maxis
declare that it will re-list the corporation in Bursa Malaysia on 11 November 2009. The
preliminary public offering, which include 30% of the firm and include its Malaysian
manoeuvres, will raise at least MYR 11.7 billion.
Maxis prepaid, Hotlink launched its #Hotlink plan in September 2013, which is known to be
the principal telecommunications corporation to bid free internet services on cellular
networks, which Hotlink nameit "Free Basic Internet." It bids download speeds up to 64kbit/s
and which the organisation says is sufficient for checking Facebook, Twitter and Wikipedia
on mobile augmented sites and also fundamentally eradicating data overage charges which as
formerly instigated at MYR 0.10/10KB.
DIGI
DIGI Statement
New.csv
Open High Low Close
Average 4.61 4.75 4.40 4.58
Std
Deviation 0.38 0.35 0.40 0.41
Stability
and Growth
of Payments
of Digi from
2016-2020
Date Dividend per share (annual) Avg. Yield (%)
3/13/2021 0.156 4.273
1/27/2021 0.156 4.189
4/23/2020 0.182 4.349
1/22/2020 0.182 4.241
1/24/2019 0.196 4.159
1/23/2018 0.188 4.151
4/10/2017 0.209 4.278
1/23/2017 0.209 4.121
4/18/2016 0.22 4.546
2/5/2016 0.22 4.474
4/13/2015 0.26 4.803
2/9/2015 0.26 4.109
4/22/2014 0.213 3.648
2/6/2014 0.213 4.121
4/16/2013 0.183 3.846
2/6/2013 0.183 3.966
1/20/2012 0.175 3.909
4/20/2011 0.163 5.176
1/28/2011 0.163 5.961
10/26/2010 0.2 8.006
7/20/2010 0.215 8.768
5/4/2010 0.215 9.372
MAXIS
Maxis Statement.csv
Open High Low Close
Average 5.60 5.77 5.38 5.58
Std
Deviation 0.42 0.42 0.42 0.45
Stability and Growth of Payments of MAXIS form 2016-2020
Date Dividend per share (annual) Avg. Yield (%)
3/13/2021 0.16 3.532
2/26/2021 0.16 3.474
10/23/2020 0.16 3.208
7/23/2020 0.16 3.154
4/24/2020 0.16 2.999
4/7/2020 0.2 3.741
2/20/2020 0.2 3.807
10/25/2019 0.2 3.713
8/2/2019 0.2 3.648
4/26/2019 0.2 3.602
2/15/2019 0.2 3.676
10/18/2018 0.2 3.665
7/18/2018 0.2 3.498
4/19/2018 0.2 3.556
2/8/2018 0.2 3.417
10/25/2017 0.2 3.349
7/20/2017 0.2 3.473
4/27/2017 0.2 3.323
2/8/2017 0.2 3.125
10/19/2016 0.2 3.34
3/23/2016 0.2 3.353
2/4/2016 0.2 3.2
3/30/2015 0.4 5.999
2/6/2015 0.4 5.648
4/9/2014 0.4 5.945
2/11/2014 0.4 5.763
4/11/2013 0.4 5.727
2/26/2013 0.4 6.142
4/16/2012 0.4 6.121
2/24/2012 0.4 6.656
4/27/2011 0.4 7.347
2/28/2011 0.4 7.404
5/21/2010 0.15 2.817
Comparison of the companies’ share risk and return
The affiliation between the volumes of return gained on an investment and the volume of risk
undertaken in that investment is the definite definition of the risk–return spectrum (also
called the risk–return trade off or risk–reward). The more return wanted, the more risk that
must be embark on.
DIGI
DIGI is less volatile than 75% of MY stocks over the past 3 months, typically moving
+/- 3% a week.
Volatility over Time: DIGI's weekly volatility (3%) has been stable over the past year.
Return vs Industry: DIGI underperformed the MY Wireless Telecom industry which
returned -9.4% over the past year.
Return vs Market: DIGI underperformed the MY Market which returned 26.9% over
the past year.
Share Price vs. Fair Value
DIGI is trading below fair value, but not by a significant amount.
-4.8% Historical annual earnings growth for the past 5 years
DIGI has high quality earnings.
DIGI's current net profit margins (19.8%) are lower than last year (22.7%).
DIGI's earnings have declined by 4.8% per year over the past 5 years.
DIGI's has had negative earnings growth over the past year, so it can't be compared to
its 5-year average.
DIGI had negative earnings growth (-14.8%) over the past year, making it difficult to
compare to the Wireless Telecom industry average (-2.3%).
Return on equity
Whilst DIGI's Return on Equity (201.53%) is outstanding, this metric is skewed due to their
high level of debt.
Return on Assets
Return on Capital Employed
MAXIS
Stable Share Price: MAXIS is less volatile than 75% of MY stocks over the past 3
months, typically moving +/- 3% a week.
Volatility Over Time: MAXIS's weekly volatility (3%) has been stable over the past
year.
Return vs Industry: MAXIS underperformed the MY Wireless Telecom industry
which returned -9.4% over the past year.
Return vs Market: MAXIS underperformed the MY Market which returned 26.9%
over the past year.
Share Price VS Fair Value
MAXIS (MYR4.53) is trading below estimated fair value of (MYR4.75)
MAXIS have trading below fair value, but not by a significant amount.
MAXIS has -7.2% historical annual earnings growth for the past five years
MAXIS have high quality earnings.
MAXIS's current net profit margins (15.4%) are lower than last year (16.3%).
MAXIS's earnings have declined by 7.2% per year over the past 5 years.
MAXIS's has had negative earnings growth over the past year, so it can't be compared
to its 5-year average.
MAXIS had negative earnings growth (-9%) over the past year, making it difficult to
compare to the Wireless Telecom industry average (-2.3%).
Return on equity
o MAXIS's Return on Equity (19.6%) is considered low.
Return on assests
Return on capital employed
IMPORTANCE OF FUNDAMENTAL ANALYSIS
Fundamental analysis is a way of assessing the intrinsic worth of an asset and examining the
elements that might impact its value in the upcoming years. This method of investigation is
grounded on exterior measures and impacts, as well as economic reports and business trends.
Fundamental analysis is one of two main approaches of market analysis, with the other being
technical analysis. While technical traders will develop all the info they require to trade from
charts, fundamental trade.
All stock analysis tries to define if a security is appropriately valued in the wider market.
Fundamental analysis is commonly completed from a macro to micro outlook in order to
recognize securities that are not appropriately valued by the market.
Market analyst normally examines the whole state of the economy and then the power of the
definite trade afore focused on specific company enactment to reach at a rational market
worth for the stock. Fundamental analysis uses open data to calculate the worth of a stock or
some other form of security. For instance, n stockholder can execute fundamental analysis on
a bond's worth by viewing at financial features such as interest tariffs and the whole nature of
the economy, then reviewing data regarding the bond issuer, such as possible fluctuations in
its credit rating. For stocks, fundamental analysis practices profits, incomes, future growth,
return on equity, profit margins, and other facts to define a corporation's fundamental worth
and prospective for upcoming growth. All of this statistics is obtainable in a company's
financial reports. (Sloan, 2019, p. 368)
There are numerous tools and methods which could be used for fundamental analysis, but
they have been characterized into two categories of fundamental analysis; top-down analysis
and bottom-up analysis. Top-down analysis takes a wider outlook of the economy, beginning
with the whole market afore constricting down into a subdivision, business and lastly a
particular establishment. On the other hand, bottom-up analysis begins with a particular stock
and expands out to consider all the aspects that influence its value. Most fundamental
analysis is used for estimating share values, but it can be used over an array of asset classes,
such as bonds and forex. The tools that traders may pick for their fundamental analysis differ
based on which asset is being dealt. For instance, share traders may select to look at the
figures in a company’s earnings report: profits, earning per share (EPS), projected growth or
profit margins. While forex traders may choose to assess the figures released by central banks
that permit perception into the state of a country’s economy.
Fundamental analysis looks at various factors that affect the price of a particular share such
as-
Business model
Industry in which company operates
Competition the company faces
Management
Financial Statements
Economy
The central of all these factors is finding the value of the company. There are several benefits
of the fundamental analysis. They are:
1. Organisation Evaluation
Administration is identical the soul of the business. It plays a precise vital part in the
development and victory of an establishment. Fundamental analysis aids in understanding the
organization of the management and how it has been performing over the years.
2. Investigating company’s strength
No matter how worthy or bad the management or other aspects are, at the end of the day
financial presentation is what matters the most. Fundamental analysis is not a very tranquil
job. People find it tough to do a stock research. Fundamental analysis is essentially “thinking
out of the box” with no pre-set considerations.
Defining corporation’s capability to beat the opponents. Even if corporation’s economic
performance is decent, what more is to be looked at is that whether the corporation is capable
to beat its opponents. If it is not competent to beat its peers, it will not be capable to persist in
the long run. This peer assessment can be prepared with the aid of fundamental analysis.
(Drakopoulou, 2016)
3. Defining fair value
By the aid of fundamental analysis, anyone can simply define the fair value of a corporation
by cautiously investigating the previous and current performance of the corporation. Fair
value aids in determining whether the corporation is overrated or underrated. On the centre of
this analysis, someone could make conclusion on what action to take. Henceforth,
fundamental analysis is essential in stock picking.
4. Forecasting future price movement
Even before an stockholder looks at a corporation’s economic reports or look after any
investigation, one of the utmost essential queries that ought be inquired is: ‘What precisely
does the corporation do?’ This is referred to as a establishment’s business model. It is by
what means a corporation makes money. Fundamental analysis examines the business and the
total economy, therefore estimates the crusade of the worth of the security. Based on definite
factors, fundamental analyst attempts to forecast the forthcoming worth.
CONCLUSION
There are several pros and cons in using fundamental analysis
Pros
Fundamental analysis aids merchants and stockholders to collect the accurate statistics to
make sensible conclusions regarding what position to take. By centring these choices on
financial data, there is restricted room for individual prejudices. Rather than creating entry
and exit points, fundamental analysis pursues to comprehend the worth of an asset, so that
merchants can take a much longer-term view of the market. As soon as the trader has resolute
a numerical value for the asset, they can compare it to the existing market value to assess
whether the asset is over- or under-valued. The objective is to then revenue from the market
correction.
Cons
Fundamental analysis could be time consuming; it involves numerous extents of analysis
which can make the method exceptionally complex. As fundamental analysis takes a much
longer-term view of the market, the outcomes of the results are not appropriate for fast
conclusions. Traders looking to generate an approach for entering and exiting trades in the
short-term might be well appropriate to technical analysis. It is also vital to study the
preeminent and the worst-case situation. While fundamental analysis offers a more well-
versed view of the market, it is potential for undesirable economic, political or legislative
deviations to surprise markets.
In share market, it is very much possible that a stock may be technically not sound but primarily,
the company is rather robust. Fundamental analysis aids in recognizing such corporations which
have great prospective for development and revenues in such investment is also very huge.
Fundamental analysis aids a lot in filtering out corporations that are financially sturdy and will
remain to stay so for a long period of time. (Krantz, 2016, pp. 1–3)
Fundamental analysis can be valuable, but it must be approached with cautiousness. It is
essential to be conversant with the analyst behind the report. We all have individual
prejudices, and every analyst has some sort of prejudice. There is nothing wrong with this,
and the study can still be of abundant significance. Learn what the ratings mean and the track
record of an analyst before jumping off the deep end. Corporate statements and press releases
offer good evidence, but they need be studied with a healthy degree of cynicism to distinct
the truths from the spin. Media statements don't occur by coincidence; they are a significant
PR instrument for corporations. Investors must turn out to be skilful readers to clear out the
essential data and disregard the hype.
REFERENCES
Equities Prices. (2000). Bursa Malaysia. https://www.bursamalaysia.com/
Maxis Berhad (KLSE:MAXIS) - Share price, News & Analysis. (2021, March 13). Simply
Wall St. https://simplywall.st/stocks/my/telecom/klse-maxis/maxis-berhad-
shares#past
Sloan, R. G. (2019). Fundamental Analysis Redux. The Accounting Review, 94(2), 363–377.
https://doi.org/10.2308/accr-10652
Drakopoulou, V. (2016). A Review of Fundamental and Technical Stock Analysis
Techniques. Journal of Stock & Forex Trading, 05(01), Volume 5-Issue 1.
https://doi.org/10.4172/2168-9458.1000163
Krantz, M. (2016). Fundamental Analysis For Dummies, 2nd Edition (2nd ed.). For
Dummies.
