KUALA LUMPUR: Telekom Malaysia Bhd
(TM) fell in early trade Tuesday despite securing a RM1.25bil contract to undertake the implementation of Next Generation Emergency Services 999 (NG999).
The counter declined two sen, or 0.29% to RM6.76 at 11.10 am. Year-to-date, TM has risen some 20.71%
TM announced that its wholly-owned subsidiary, TM Technology Services Sdn Bhd (TM Tech) entered into a contract with the government, represented by the Ministry of Communications, to implement NG999.
NG999 will be for 12 years, commencing from the effective date in 2024, the date of which will be determined by the government, until 2036.
“We are neutral on this announcement, as we have earlier assumed that TM will secure an extension for this existing contract. Based on our estimates, this contract will contribute 0.3% and 1.4% to FY24F and FY25F earnings, respectively,” Kenanga Investment Bank said in a report.
It has maintained its forecasts, target price of RM7.53 and “outperform” call on TM.
Meanwhile, MIDF Research kept its “neutral” recommendation on TM with an unchanged target price of RM7.03.
“While the news may attract investors’ interest, it is a renewal of the group’s existing 999 emergency services,” it said.
“Given that the concession is a continuation of the previous project, we made no changes to our earnings estimates at this juncture.”
