KUALA LUMPUR (May 28): Telekom Malaysia Bhd (TM) emerged as one of the top gainers on Bursa Malaysia in the morning trade after recording solid results for the first quarter of financial year 2021 (1QFY21) ended March 31, 2021.
At 10.15am, TM shares jumped 33 sen, or 5.59%, to RM6.23 from RM5.90 at Thursday’s close, with 3.86 million shares changing hands.
The telecoms giant, in an exchange filing yesterday, said its net profit more than doubled to RM325.47 million in 1QFY21 from RM152.52 million in 1QFY20, lifted by higher revenues across all its segments apart from its other telecoms services.
In a note today, Maybank Investment Bank Bhd Research said TM’s core net profit of RM332 million (up 38% year-on-year) was 30% of both the research house’s and consensus’ FY21 forecasts.
“The overall outlook remains favourable, with TM potentially benefitting from both the work-from-home and 5G-deployment themes, and ongoing cost optimisation.
“Hence, we reiterate ‘buy’ call with an unchanged target price of RM7.40,” it said in a note.
Similarly, MIDF Amanah Investment Bank Bhd Research also maintains its “buy” recommendation on TM with an unchanged target price of RM6.91.
The research house is of the view that the MyDIGITAL initiatives would bode well for the group.
“Premised on this, we expect the group’s revenue growth in the coming years to remain intact. Moreover, we commend the group’s cost rationalisation programme which has significantly improved the group’s profitability,” it said in a separate note.
Meanwhile, Public Investment Bank Bhd upgrades its call on TM to “outperform” from “neutral”, with a higher target price of RM6.90 from RM6.60.
“Being the largest domestic data centre provider in Malaysia, we believe TM would benefit from higher data and internet consumption in the future, following the government’s plan to establish hyper-scale data centres under the MyDIGITAL blueprint,” it said.
