Imri’s resignation not expected to have much impact on TM

This article first appeared in The Edge Financial Daily, on January 31, 2020.
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Telekom Malaysia Bhd
(Jan 30, RM3.86)
Maintain hold with an unchanged fair value of RM3.50:
The New Straits Times reported that Telekom Malaysia Bhd (TM) chief operating officer (COO) Imri Mokhtar, who was the acting group chief executive officer (CEO) from November 2018 until June 2019 and originally chosen by the ministry of finance to be the CEO, has resigned from the group.

 
In an internal email to its staff yesterday, TM group CEO Datuk Noor Kamarul Anuar Nuruddin said Imri had decided to leave the company effective Jan 31, 2020, to pursue other opportunities.  

Imri, 46, was appointed acting group CEO following the resignation of Datuk Bazlan Osman in November 2018. Following the appointment of Noor Kamarul in June last year, Imri resumed his post as TM COO.

Starting his career with TM in 1996 and rejoining TM in 2005, Imri had served in various positions, including programme and performance management office vice president and consumer executive vice president.

Prior to rejoining TM in 2005, Imri was at a pay-television operator in Malaysia and before that, a consultant at a global management consulting firm. He is also a director of Webe Digital Sdn Bhd, now renamed unifi Mobile.  

Separately, TM named Anand Vijayan as its new chief commercial officer, responsible for unifi product development and marketing for consumer and small and medium enterprises as well as for the group’s regional operations, effective from Feb 1, 2020.  

We do not expect Imri’s resignation to significantly impact the group’s strategic direction and operations, given that the current CEO Noor Kamarul has already been in his role for six months amid the support of a broad middle-level management executives.  

Nevertheless, the potential impact of the National Fiberisation and Connectivity Plan, which could further halve entry price packages this year while significantly raising the capital expenditure levels of fibre infrastructure owners, together with fifth-generation roll-outs could translate into lower dividend payouts. Hence, the stock currently trades at a fair forecasted financial year 2020 enterprise value to the earnings before interest, taxes, depreciation, and amortisation ratio of five times with a decent dividend yield of 4% for now. — AmInvestment Bank, Jan 30