PETALING JAYA: RHB Research is staying neutral on the telecommunications sector after most telcos reported second quarter (2Q25) and first half of (1H25) results in line with expectations.
However, the research house pointed out that there were earnings misses at CelcomDigi Bhd
and OCK Group Bhd, and a slight beat for Maxis Bhd.
It highlighted that Malaysia’s telcos posted 6% returns year-to-date (y-t-d), which was the second-strongest regional performance after Singapore (18%) and ahead of Thailand (1.5%) and Indonesia (5.3%).
The research house said in terms of stocks, TIME Dotcom Bhd saw the largest share price gain of 19% y-t-d, although much of this was realised in 1H25.
“Axiata Group Bhd followed in second place (12% y-t-d) with a stellar 29% rally over the past three months while Telekom Malaysia Bhd’s (TM) share price gained 9%. Having ceded earlier gains, the share prices of Maxis and CelcomDigi were largely steady y-t-d,” it added.
The research house said aggregate sector core earnings rose 11% year-on-year (y-o-y) in 2Q25 on the back of the 9.8% and 12.8% increases in mobile and fixed-line earnings, respectively.
It added that cost pressures continue to be well managed, with sector earnings before interest, tax, depreciation and amortisation (Ebitda) holding up despite the subdued revenue momentum.
It pointed out that aggregate sector Ebitda (excluding Axiata) inched higher by 1% y-o-y in 2Q25 on tight cost controls.
Maxis’ 2Q25 Ebitda grew 5% with its Ebitda share rising in the quarter to 44.1%.
“We continue to like the fixed-line players on structural catalysts and the more resilient earnings profile,” RHB Research said.
It shared that industry fixed line revenue fell 3.3% y-o-y in 2Q25, led by the 4.7% drop in TM’s retail internet revenue, which slipped for the second quarter in a row as competition and promotional offers crimped average revenue per user (Arpu) with lower subscriber growth.
RHB Research has lowered Axiata, CelcomDigi, Maxis and OCK’s FY25 to FY27 earnings forecasts but maintained them for the other telcos.
