Research houses retains 'buy' call on TM (4863)

KUALA LUMPUR: Research houses have generally maintained
a "buy"
recommendation for Telekom Malaysia (TM) Bhd due to its first half
financial year 2012 results that came in within and above their
expectations.

Alliance Research said as the first half
financial year 20121 (HFY12) was above its forecast, it expects second
half financial year 2012 (2HFY12) results to be stronger on the back of
still strong Unifi take-up rate and a boost from its recent SuperSpeed
promotion campaign.

"Despite competition from access seekers,
Unifi take-up rate momentum is still going strong, underpinning the
robust earnings growth for TM.

"Hence, we raise our financial
year 2012-2013 earnings forecasts by 6.4 per cent and 9.8 per cent,
respectively," it said in a research note today.

Alliance maintained a "buy" recommendation with a higher RM7.10 target price.

Meanwhile, Maybank IB Research foresees 2HFY12 results to be more
challenging, given the prospect of increasing competition, driven mainly by Maxis and rising costs.

"We
believe TM is well prepared on all fronts. We also believe Maxis will
remain in its competition and will not send the industry into a
tailspin," it added.

Maybank IB Research has reiterated a "buy" call with a higher RM6.61 target price.

In another note, MIDF Research believes TM can achieve 500,000 Unifi customers by end of the 2012 financial year.

It said Unifi continued to grow strongly despite the competition.

As at the second quarter, Unifi customers reached 384,000, a 21.6 per cent quarter-on-quarter increase, it said.

"Whilst
Streamyx customers declined by 1.9 per cent year-on-year to 1.66
million, we are are not concerned about it due to migration to Unifi,
which commands better average revenue per user," it said.

MIDF also maintained a "buy" recommendation for the counter with a higher RM6.75 target price.

AmResearch also retained a "buy" call on TM with a higher fair value of RM6.70 per share.

However,
JF Apex Securities has downgraded its call from "buy" to "hold", with
RM6.15 target price, and 2.7 per cent potential upside as TM's share
price had appreciated 27 per cent year-to-date.

"We also see
the potential for re-rating as Unifi services are being extended to
more areas in the country," it added. -- BERNAMA