KUALA LUMPUR (Oct 16): Affin Hwang Capital Research has maintained its “Sell” rating on Telekom Malaysia Bhd (TM) at RM2.60 with a lower target price of RM2.25 (from RM3) in view of intensifying competition, declining ARPUs, weaker profitability and a rising risk premium.

In a note today, it said notwithstanding a 59% year-to-date-2018 slide in TM’s share price, it believes the worst is not over, in view of the downside risks in consensus earnings forecasts, likely revision of dividend policy, rising competition and possible exclusion from the FBM KLCI Index.

“De-rating factors include a potential Streamyx price cut, consensus earnings cut and possible exclusion from the FBM KLCI Index.

“Upside risks: robust broadband ARPUs, strong subscriber growth and material decline in operating costs,” it said.