Stock Name: TM
Company Name: TELEKOM MALAYSIA BHD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research says there is no change to its forecasts and DCF-based price target of RM3.45. It said on Friday, March 26 that TM's share price has rallied 12% since it upgraded the stock in January 2010. "Factoring in 5.6% net dividend yield, total return on TM share is now only 5%. Share price has run-up since our upgrade, now offers limited upside. Downgrade to HOLD. Fundamental view on TM is intact," it said in a research note. HDBSVR said TM's lowest high-speed broadband package price of RM149 implies average revenue per user (ARPU) could be higher than it assumed. It said this strengthens its view that TM's 20 sen/share dividend commitment is intact The research house said in its earlier scenario analysis for the HSBB, it assumed RM150 ARPU. But with HSBB packages priced at RM149-RM249, HSBB ARPU may surpass its assumption of RM150. While these plans come with fair usage limits of 60GB-120GB, they offer free voice calls to TM fixed lines and cheap 10 sen/minute tariff to mobile numbers. "In our earlier scenario analysis, we concluded that TM's commitment to pay 20 sen/share dividend is sustainable. The potential upside to ARPU assumption further supports our view," it said.
Company Name: TELEKOM MALAYSIA BHD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research says there is no change to its forecasts and DCF-based price target of RM3.45. It said on Friday, March 26 that TM's share price has rallied 12% since it upgraded the stock in January 2010. "Factoring in 5.6% net dividend yield, total return on TM share is now only 5%. Share price has run-up since our upgrade, now offers limited upside. Downgrade to HOLD. Fundamental view on TM is intact," it said in a research note. HDBSVR said TM's lowest high-speed broadband package price of RM149 implies average revenue per user (ARPU) could be higher than it assumed. It said this strengthens its view that TM's 20 sen/share dividend commitment is intact The research house said in its earlier scenario analysis for the HSBB, it assumed RM150 ARPU. But with HSBB packages priced at RM149-RM249, HSBB ARPU may surpass its assumption of RM150. While these plans come with fair usage limits of 60GB-120GB, they offer free voice calls to TM fixed lines and cheap 10 sen/minute tariff to mobile numbers. "In our earlier scenario analysis, we concluded that TM's commitment to pay 20 sen/share dividend is sustainable. The potential upside to ARPU assumption further supports our view," it said.
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