January 24, 2011

TM - Citi ups TM's target price to RM3.22

Stock Name: TM
Company Name: TELEKOM MALAYSIA BHD
Research House: CITI GROUP

Citi raised the target price for Telekom Malaysia (TM) to RM3.22, which factors in TM's earnings revisions by Citi.

This is a roll-forward of its discounted cash flow to financial year 2011, inclusion of proceeds from sale of its Axiata shares and the value of its remaining shares based on Axiata target price.

"We acknowledge that TM’s share price has risen on an expected bumper pay-out from cash generated from these asset sales. Still, we caution that dividends without changes in capital structure do not create extraordinary value as these are merely paid out of the existing value/cash flow of the company," says Citi.

Citi raised its target price for TM to RM3.22, but maintains a 'sell' call on the stock. - Reuters

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