Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 29): Shares in Telekom Malaysia Bhd (TM) fell as much as 9.1% in active trading this morning, following the release of its result for the first half ended June 30, 2019 (1HFY19) yesterday.

CGS-CIMB Research in a note today downgraded the stock to "reduce" at RM4.08, albeit with a higher target price of RM3.70 (from RM3.40).

The research house said the downgrade was due to the recent share price rally.

"Its FY20F EV/OpFCF of 9.7x is at a 36% discount to the ASEAN telco average, which is justified by its muted earnings outlook," it said.

At 10:23am, TM shares fell 37 sen to RM3.71, valuing the telco at RM13.97 billion. The stock saw 9.19 million shares traded, making it the 11th most actively traded counter on Bursa Malaysia.

TM's 52-week high was on Aug 22, when it reached RM4.60, and its one-year low was on Oct 26, when it closed at RM2.14.

According to Bloomberg, TM has 26 analysts covering the stock. Three of them have buy calls, 13 have hold calls and 10 have sell calls, with a 12-month consensus target price of RM3.96.

For the second quarter ended June 30, 2019 (2QFY19), TM's net profit rose 12% year-on-year (y-o-y) to RM114.18 million, from RM101.93 million, translating into higher earnings per share of 3.04 sen, from 2.71 sen a year prior.

Quarterly revenue declined 6% y-o-y to RM2.77 billion, from RM2.94 billion on the back of a decline in voice, Internet and multimedia services, other telecommunication related as well as non-telecommunication related services.

For 1HFY19, net profit expanded 63% to RM422.46 million, from RM259.09 million in the corresponding period last year, despite revenue declining 4% to RM5.55 billion, from RM5.78 billion last year.

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