TM’s revenue growth expected to remain intact in coming years

MIDF Research noted that TM’s cost rationalisation programme has also significantly improved the group’s profitability.

PETALING JAYA: Telekom Malaysia Bhd’s (TM) revenue growth is expected to remain intact in the coming years, well supported by its main revenue clusters namely Unifi, TM One and TM Wholesale.

According to MIDF Research, the announced Malaysian Digital Economic Blueprint (MyDigital) initiatives would bode well for the group, which is the sole cloud service provider in Malaysia.

This will help to accelerate TM’s convergence offerings to its 2.6 million home customers and 400,000 small and medium enterprises and micro businesses, the research house said in its latest report.

MIDF Research noted that TM’s cost rationalisation programme has also significantly improved the group’s profitability.

Meanwhile, the research house is also positive on TM’s unit Webe Digital Sdn Bhd, which recently accepted an offer for a 20 MHz spectrum block from Malaysian Communications and Multimedia Commission.

“This will see an increase in capacity, which will allow TM to provide seamless fixed and wireless access, and content to its retail and enterprise customers at home, office or on the move, aligning its mission to embark into a dynamic digital space,” added the research house.

MIDF Research estimated that TM’s balance sheet to be least affected by the annual fee for the spectrum assignment acceptance.

“Therefore, we would like to reiterate our recommendation that investors should maintain their exposure in TM, as the nation’s main fixed line player and better opportunities with MyDigital’s initiatives,” it said.

All factors considered, the research house maintained a “buy” call on TM with an unchanged target price of RM6.91.