Axiata Group Bhd shares on Bursa Malaysia rose in early trade today following the announcement of its merger operations with Dialog Axiata PLC and Bharti Airtel Ltd in Sri Lanka, including the acquisition of the entire issued shares of Bharti Airtel Lanka Ltd.
MIDF Research said the transaction will help improve Dialog’s market share in Sri Lanka but disheartened by Airtel Lanka’s loss-making position.“We expect Airtel Lanka will not see any contribution to Dialog’s bottom line anytime soon as we expect the merger synergies to be able to only negate Airtel Lanka’s loss-making position, at best.
“On a separate note, we are also of the view that funding via share swap also signals Axiata’s tight financial position. We are keeping our ‘neutral’ call with an unchanged target price of RM2.42,” it said in a note. RHB Investment Bank Bhd views Dialog’s guidance of neutral to positive earnings accretion for the financial year of 2025 from its merger with Airtel suggests good synergies to be extracted, with the overall impact on Axiata’s earnings to be manageable in the medium term.“We continue to like Axiata, with the earnings rebound and balance sheet deleveraging thesis as key share price catalysts. We maintained a ‘buy’ call with a TP of RM3.40,” it said.