MAXIS Communications Bhd, which is planning to re-list its Malaysian operations under an initial public offering (IPO), may fetch a market capitalisation of RM42 billion, ECM Libra Investment Research said in a note today.

It said Maxis' IPO shares may trade in the range of around RM5 and RM6.20, assuming a PE multiple range of between 16x and 20x based on FY10 EPS estimate.

"However, we believe Maxis will likely trade at around RM5.60 based on a PE multiple of 18x, taking into account its mobile market leadership thus deserving premium valuation over DiGi (16x), but a discount to TM's fixed-line and broadband monopoly (20x)."
At a prospective RM5.60 per share, Maxis will generate minimum dividend yields of 4.2 per cent in FY10, it added.

"Such yields are lower than our estimates for DiGi and TM, but perhaps investors may overlook this to have a stake in a blue-chip company that may fetch a market capitalisation of RM42 billion," ECM Libra said.