It said this in view of downside risks in consensus earnings forecasts, a likely revision in dividend policy, rising competition and a possible exclusion from the FBM KLCI,
The research house maintained its sell rating on the counter with a lower price target of RM2.25 from RM3 previously.
In a Tuesday research report, it said the threat of possible new entrants and intensifying competition among the existing broadband service providers should challenge TM's market dominance and profitability.
Affin Hwang does not expect a further reduction in broadband package prices over the next few quarters following the 39% reduction in Unifi's basic package price and the upgrade of broadband speed.
"However, we see downside risk to the Streamyx package prices, where TM has yet to make any reduction. It was reported that Communications and Multimedia Minister Gobind Singh Deo
wants to tackle the Streamyx issues immediately," it said.
The research house cut its FY18-20E core earnings per share forecasts by 6-18% after imputing lower Unifi prices, higher A&P expenses and weaker subscriber growth of 1%, from 2% previously.
"We forecast TM’s 2019-20E revenue to decline by c.RM900m-RM1bn from the 2016-17 (pre-broadband price cut) level of RM12.1bn. Constrained by its high fixed costs and finance charges, the revenue dip should have a material impact to its earnings and dividend per share."