AmResearch has a Buy call on Telekom Malaysia with a fair value of RM3.90.
It said TM’s Unifi attracted a total of over 7,000 subscribers since its launch almost five months ago. This encouraging subscriber base came in on back of 18 new areas covered, from just four areas during the launch.
“We find the speed of subscriber acquisition strong - we are also looking at a rather high year-end target for Unifi of 20,000 subscribers. To date, total number of premises passed has increased to at least 400,000, versus 750,000 targeted for December 2010,” it said.
AmResearch said the bandwidth of Unifi allows for greater amount of traffic within its fibre optic cables.
The research house maintained its preference on TM on its unique buffer dividend policy. It continues to rate TM a BUY with fair value of RM3.90/share on DCF-based valuation (terminal growth 1.5% and WACC 9.7%).
On dividend yield comparison, it said TM offers a slightly higher yield of 5.2% (versus 5.1% at DiGi and 4.7% in Maxis).
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