KUALA LUMPUR: Research houses have generally maintained a “buy” recommendation for Telekom Malaysia (TM) Bhd due to its first half financial year 2012 results that came in within and above their expectations.
Alliance Research said as the 1HFY12 was above its forecast, it expects second half financial year 2012 (2HFY12) results to be stronger on the back of still strong Unifi take-up rate and a boost from its recent SuperSpeed promotion campaign.
“Despite competition from access seekers, Unifi take-up rate momentum is still going strong, underpinning the robust earnings growth for TM.
“Hence, we raise our financial year 2012-2013 earnings forecasts by 6.4% and 9.8%, respectively,” it said in a research note today.
Alliance maintained a “buy” recommendation with a higher RM7.10 target price.
Meanwhile, Maybank IB Research foresees 2HFY12 results to be more challenging, given the prospect of increasing competition, driven mainly by Maxis and rising costs.
“We believe TM is well prepared on all fronts. We also believe Maxis will remain in its competition and will not send the industry into a tailspin,” it added.
Maybank IB Research has reiterated a “buy” call with a higher RM6.61 target price.
In another note, MIDF Research believes TM can achieve 500,000 Unifi customers by end of the 2012 financial year.
It said Unifi continued to grow strongly despite the competition.
As at the second quarter, Unifi customers reached 384,000, a 21.6% quarter-on-quarter increase, it said.
“Whilst Streamyx customers declined by 1.9% year-on-year to 1.66 million, we are are not concerned about it due to migration to Unifi, which commands better average revenue per user,” it said.
MIDF also maintained a “buy” recommendation for the counter with a higher RM6.75 target price.
AmResearch also retained a “buy” call on TM with a higher fair value of RM6.70 per share.
However, JF Apex Securities has downgraded its call from “buy” to “hold”, with RM6.15 target price, and 2.7% potential upside as TM’s share price had appreciated 27% year-to-date.
“We also see the potential for re-rating as Unifi services are being extended to more areas in the country,” it added.