Kenanga upgrades Telekom profit forecast

Kenanga upgrades Telekom profit forecast
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Friday, 29 November 2013 09:50

KUALA LUMPUR (Nov 29): Kenanga Investment Bank Bhd has raised its core net profit forecast for Telekom Malaysia Bhd (TM). The upgrade takes into account lower interest cost and tax rate.

In a note today, Kenanga analyst Cheow Ming Liang said the firm has however maintained its "outperform" call and target price of RM5.94 for TM shares. The stock rose one sen to RM5.15 at RM9.41am.

"We have raised our FY13E (+2.0%) and FY14E (+3.6%) core NPs after lowering the interest cost and effective tax rate assumptions," Cheow said.

Kenanga's note follows the announcement of TM's financials. Yesterday, TM said net profit fell 20% to RM240.88 million in the third quarter ended September 30, 2013 from RM301.41 million a year earlier. Revenue rose to RM2.61 billion from RM2.38 billion.

Cumulative nine-month (9MFY13) net profit fell to RM667.97 million from RM900.49 million a year earlier. Revenue was however higher at RM7.65 billion from RM7.18 billion.

Cheow said TM's 9MFY13 core net profit was above forecast at 84.4% and 87.2% of Kenanga's and street full-year estimates respectively.