KUALA LUMPUR, Aug 28 — Telekom Malaysia Bhd’s (TM) share price rose in the morning session today after recording stronger financial performance in the second quarter ended June 30, 2023 (2Q 2023).
At 11am, the company’s shares increased two sen to RM5.08 per unit, with 767,900 shares traded.
In 2Q 2023, TM’s net profit climbed 50.43 per cent to RM568.74 million from RM378.06 million in 2Q 2022.
Similarly, revenue for the quarter under review rose 0.3 per cent to RM3.10 billion from RM3.09 billion previously, propelled by Unifi’s expansion which saw a surge to 3.11 million fixed broadband subscribers.
Public Investment Bank Bhd expects TM One’s earnings to be weaker due to lower prices in large contracts, particularly for MyGov*Net 2.0.
“Nonetheless, we expect the offsetting effect from lower tax rates to continue beyond 2023, following TM Tech’s internal reorganisation to enable the use of tax credits accrued,” it said.
Additionally, it said TM remains their top pick in the telco space, due to it being the country’s preferred network infrastructure provider.
Public Investment Bank maintains its “outperform” call with an unchanged target price (TP) of RM6.20.
Meanwhile, Hong Leong Investment Bank Bhd reiterated its “buy” call with a TP of RM7.15.
“We are particularly positive on its cost optimisation measures which are now yielding an impact.
“Leveraging on its extensive fibre reach, TM is perceived to be the critical fundamental building block of the government’s 5G rollout under the MyDigital initiative.
“Furthermore, TM is well positioned as Malaysia’s sole cloud service provider; sovereignty is of utmost importance when dealing with government data,” it said.
Hong Leong Investment Bank said the 2023-2025 earnings projections are adjusted by raising it by 16 per cent for 2023 and an additional one per cent each for 2024 and 2025. — Bernama
