KUALA LUMPUR: Kenanga Research raised Telekom Malaysia Bhd's (TM) target price (TP) to RM7.53 from RM7.22 after the telecommunications company's results for the first quarter ended March 31, 2024 (1Q 2024), tracked expectations.
It said TM is being leveraged towards secular data growth on the back of current trends such as digital transformation, the Internet of Things (IoT), and artificial intelligence (AI), and it is benefitting from National Digital Network (JENDELA) phase 2 projects via roll-out and monetisation opportunities.
In a research note, Kenanga said it is favourable on TM due to earnings accretion from the potential development of a new hyperscale data centre, and higher demand for data transmission via its network of digital infrastructure, which includes submarine cables and landings as well as fibre optics backhaul.
Meanwhile, MIDF Research upgraded TM's TP to RM6.15 from RM5.58.
It said TM's 1Q 2024 financial performance was within expectations, representing 25.2 per cent of its full-year 2024 financial year earnings estimates.
TM's 1Q 2024 net profit rose by 28.7 per cent to RM424.81 million from RM330.10 million registered in the previous corresponding quarter.
Revenue increased 1.8 per cent to RM2.84 million from RM2.79 million previously, driven by solid performance from TM Global and growth in Unifi's subscriber base.