Dubai-Mubasher: MubasherTrade Research (MTR) set the price target (PT) of UAE telecom provider du at AED 6.23, maintaining “Buy” recommendation, according to a recent report.
The operator’s net earnings came in line but were pressured by higher royalties as expected.
du reported an 8% decline in profits after royalty to AED 460 million in the fourth quarter of 2015, compared with AED 500 million in the same quarter of 2014.
In the fiscal year 2015, net profits after royalty decreased 7.7% to AED 1.94 billion as compared to AED 2.1 billion in the fiscal year 2014.
The operator’s stock declined 2.05% to reach AED 5.73 by 12:30am UAE time.
MTR reiterated its positive view on du's business growth, backed by infrastructure sharing, commitment to the UAE's smart government initiative, the country's high purchasing power, expansion in the real estate sector as well as the expected inflow of investments and expatriates to the UAE ahead of Expo 2020.
MTR believes that the mechanism of calculating royalty fees imposed on the UAE’s telecom companies will affect du more than Etisalat in the long term.
