KUALA LUMPUR, Feb 28 — RHB Research Institute Sdn Bhd has maintained a "buy” call on Telekom Malaysia Bhd (TM) with a lower target price of RM6.80 from RM7.30, after the telecommunication giant posted flattish revenue and updated its net debt position for the financial year ended Dec 31, 2017 (FY17).

In a note today, RHB Research Institute Sdn Bhd noted that stronger-than-expected competition, execution and negative regulatory developments were key risks faced by the company. 

"However, TM remains our preferred domestic telco exposure, with the strong combination of fixed and mobile connectivity driving its fixed-mobile convergence strategy,” it said.

Meanwhile, Maybank Investment Bank Bhd (Maybank IB) maintained a "hold” call on TM with an unchanged target price of RM6.

"We lower our FY18/19 earnings forecasts by 3 per cent/ 6 per cent on housekeeping,” it said.

Public Investment Bank Bhd maintained a "neutral” call on TM with an unchanged target price of RM6.                 

The company’s second interim dividend of 12.1 sen per share declared was in line with the research house’s estimate.

"Our FY17-19 earnings forecast remains unchanged, while for the FY18, management’s headline key performance indicator for revenue growth is set at 3.5 to 4 per cent, and earnings before interest and taxes growth is maintained at the FY17 level,” it said.

TM recorded earnings of RM929.75 million for FY17, up 19.8 per cent from the RM776.03 million a year earlier, while revenue edged up 0.2 per cent to RM12.08 billion from RM12.06 billion.

At 10.58am, TM’s share slid four sen to RM5.99, with 498,800 shares traded. — Bernama