April 7, 2010

TM - Price Target News

Stock Name: TM
Company Name: TELEKOM MALAYSIA BHD
Research House: AMMB

KUALA LUMPUR: AmResearch has upgraded TELEKOM MALAYSIA BHD [] (TM) to a buy at RM3.50 with a higher fair value of RM3.90, and has also revised its earnings estimate for the company.

"We basically prefer TM in the current intense competition for space that is going on in the mobile broadband segment. This effectively puts risks to the established dividend policy of the others.

"TM on the other hand is insulated from this as it has set a minimum payout ratio of 20 sen per share," it said.

AmResearch said TM has the highest yield at 5.2% (versus Digi 5.1% and Maxis 4.7%).

"With this our neutral view on the sector remains.

"We are looking at broadband (both fixed line and mobile) to be the growth driver. We are upbeat on net addition of subscriber base. We have imputed more than 45% year-on-year subscriber growth for FY10," it said.

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