Return of the King, slowly but surely!

CGS-CIMB sees Telekom Malaysia announcing a special dividend for 4Q20.

In a note dated Feb 5, the research house's analysts Foong Choong Chen and Sherman Lam Hsien Jin said they assumed a 60% payout ratio for FY20 to FY22 (dividend per share [DPS]: 17.3 to 21.6 sen), in line with TM's dividend policy.

"However, we believe it has the capacity to pay more as its net debt/EBITDA (earnings before interest, taxes, depreciation, and amortisation) eases from 1.2 time at end-FY20 to 0.9 time at end-FY22.

"Specifically for FY20, given FCF per share of 39.4 sen, we think there could be a special dividend in 4Q20. Assuming extra 20% payout, FY20 DPS will be 23.1 sen (yield: 3.6%)," they said.

They also expect that TM 4Q20 core earnings per share (EPS) may benefit from strong Unifi net adds and seasonality.

Due to the imposition of the Conditional Movement Control Order since mid-October, they believed Unifi demand should have spiked as employees worked and students studied from home.

Besides robust internet growth, they estimate TM's 4Q20 revenue benefitted from positive seasonality, with voice (wholesale minutes), data (indefeasible right of use) and other (customer ICT projects) revenues rising quarter-on-quarter.

"Hence, we believe 4Q20 total revenue rose 9% to 10% quarter-on-quarter (down 2% to 3% year-on-year) and EBITDA gained 7% to 8% quarter-on-quarter (up 11% to 13% year-on-year).

"EBITDA margin likely eased 0.5% to 1% point quarter-on-quarter to about 38% due to seasonally higher costs but this was still a major 5% to 6% point improvement year-on-year. FY20 EBIT (earnings before interest and taxes) likely came in at about RM1.7 billion, soundly beating TM's guidance of RM1.3 billion to 1.5 billion," they said.

Factoring in more optimistic assumptions for fibre net adds and slightly lower operating expense, they raised TM's FY20 to FY22 EBITDA/core EPS by 2.7 to 5.1%/8.8 to 15.4%.

"Post this revision, we now forecast FY20/21/22F EBITDA to grow 0.6%/6.4%/4.2% year-on-year on revenue recovery, with cost-saving initiatives helping to buffer any pressure from fibre rollout acceleration.

"Core EPS should rise 8.4%/15.4%/7.9% year-on-year, partly offset by rising depreciation (higher capital expenditure),' they said.

They reiterate "add" call on the stock, and raise its target price 25% to RM7.00 after FY20 to FY22 earnings hike.

TM will report its 4Q20 results on Feb 24.

Hahaha. Manipulation to get people to sell.. I personally welcome anyone to sell at RM9.65 or less, thousand investor out there waiting to buy, me included.

TM to post strong revenue in FY21-FY22: RHB Research

KUALA LUMPUR: Telekom Malaysia Bhd (TM) is likely to chart stronger revenue for unifi and internet in the financial year ending December 31, 2021 (FY21) and FY22, said RHB Investment Bank Bhd.

Its analyst Jeffrey Tan said the higher revenue could be attained from higher fixed/fibre broadband subscriptions from extended work-/study-from-home arrangements, the aggressive targets for fibre premises passed under the National Digital Network (Jendela) infrastructure plan, and the on-going conversion of narrowband/Streamyx customers to fibre.

TM added a record 97,000 unifi subscribers in the third-quarter of 2020 due to strong broadband take-up from the teleworking phenomena.

"For the first-nine month of 2020 (9M20), TM added 204,000 new unifi subscribers, more than the average of 170,000 additions pa in FY17- FY19," he said in a research report today.

Tan said the accelerated digitalisation trend by enterprises would be positive for TM's data revenue via demand for cloud services.

He said TM should also benefit from government's 2021 Budget for the grants/initiatives extended to small and medium-sized enterprises, with renewed public sector information, communication and telecommunication (ICT) spending after some delays due Covid-19.

"We gather TM is seeing renewed demand for connectivity and data centre (DC) solutions from over-the-top (OTT) companies, with new deals clinched on content delivery services from an Asian-based OTT player.

"It may kick-start phase two of its Klang Valley Data Centre, if DC pipelines remain strong," he said.

Tan said TM has targeted a further RM500 million in cost savings over the next three to five years as the operational expenditure savings would come mainly from staff, operations and maintenance, and the upgrade of its IT systems including a new business support system platform.

"TM remains a key beneficiary of the infrastructure roll-out, under the Jendela. We lift FY21-FY23's core earnings by 8.0 per cent to 12 per cent after imputing stronger internet and data growth assumptions, while expecting further cost vigilance."

The research firm has maintained a "Buy" call for TM with a target price of RM7.20.

Healthy corrections for long term investor.

Healthy corrections.

Buy when others fear...wait for Q4 2020 result fly to sky.

Support at rm9. Mco will hurt tnb revenue

TM has history of being a cash cow and high paying dividend blue chip. The time has come.. digitalisation era.

run !!! lols

"On stocks selection, we believe pure plantation players (eg IJMPLNT, TSH, HSPLANT, FGV, SWKPLNT, KMLOONG, BPLANT, THPLANT etc) to benefit more from the recent surge in FCPO prices (+9.57% WoW) and 13.6% MoM) and could attract active trading interests in the near term. To recap, recent surge in FCPO was mainly driven by a confluence of positives such as playing catch-up with a rally in soybean prices due to robust demand from China (as major crops were destroyed by typhoons), renewed buying interests from India, a weak USD, expectations of the development of a La Niña climate pattern potentially leading to lower production etc.

Based on the monthly chart, FCPO could break the formidable LT neckline resistance near RM3200, supported by the bullsih indicators. A decisive breakout above this hurdle could spur prices higher at RM3400-3600 zones. Key supports are situated at RM2700-2900 levels."

Ride before too late...

" On stocks selection, we believe pure plantation players (eg IJMPLNT, TSH, HSPLANT, FGV, SWKPLNT, KMLOONG, BPLANT, THPLANT etc) to benefit more from the recent surge in FCPO prices (+9.57% WoW) and 13.6% MoM) and could attract active trading interests in the near term. To recap, recent surge in FCPO was mainly driven by a confluence of positives such as playing catch-up with a rally in soybean prices due to robust demand from China (as major crops were destroyed by typhoons), renewed buying interests from India, a weak USD, expectations of the development of a La Niña climate pattern potentially leading to lower production etc.

Based on the monthly chart, FCPO could break the formidable LT neckline resistance near RM3200, supported by the bullsih indicators. A decisive breakout above this hurdle could spur prices higher at RM3400-3600 zones. Key supports are situated at RM2700-2900 levels. "

Ride before too late....