JKSB: Quarterly Highlights: Dialog Axiata PLC (DIAL): 1QCY19
DIAL reported robust growth in earnings (+71% YoY) for 1QCY19 resulting from stronger topline contributions from data, mobile and fixed segments. GP margins and operating margins for the group remained stable throughout the quarter. Stronger performance was largely from mobile operations which grew by 21% for data and 2% for voice segments YoY. EBITDA margins grew from 38.2% to 41.6% due to the adoption of SLFRS 16 ‘Leases’ alongside topline growth and cost optimizations at a company level. Strong growth in PAT (+72% YoY) as a result of improved EBITDA performance and non-cash forex translation gains further strengthened quarterly performance of the company.
We conservatively estimate DIAL s’ full year CY19E earnings to reach Rs. 9,955 mn predominantly driven by stronger contributions from data revenues through increased smartphone penetration. However expected slowdown in consumer activity due to subdued economic conditions will have an adverse effect on the company’s performance in the forecasted period. At the current price of Rs. 9.00, DIAL trades at an CY19E P/E of 7.4x which is at a discount to the P/E of 7.94x of our JKSB coverage universe.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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