KUALA LUMPUR, July 13 ― AmInvestment Bank Bhd is maintaining its “buy” call on Telekom Malaysia Bhd (TM) following yesterday’s announcement of Datuk Mohammed Azlan Hashim’s appointment as the telecommunications provider’s chairman effective August 1, 2021.
Azlan, 64, has extensive experience in investment and financial services, including as a board member of Khazanah Nasional Bhd as well as on the board and chairmanship of the Employees Provident Fund’s (EPF) investment panel.
He was chief executive of Bumiputra Merchant Bankers, managing director of Amanah Capital Malaysia and executive chairman of Bursa Malaysia Securities.
Azlan is also currently the chairman of several public listed companies, including D&O Green Technologies, Marine & General, and IHH Healthcare.
“We expect Azlan to work well with TM’s managing director and group chief executive officer Imri Mokhtar, who has been in that role for a year,” AmInvestment Bank said in its report today.
Azlan replaces Tan Sri Mohd Bakke Salleh, 67, who has been appointed as the new chairman of Petroleum Nasional Bhd effective Aug 1, 2021.
AmInvestment Bank noted that under Imri’s direction, TM generated substantive cost savings as operating expenses for the financial year ended December 31, 2020 (FY2020), declined by 6.7 per cent year-on-year.
For 2021–2023, management has identified over 40 key initiatives to drive the telecommunications provider’s next phase of growth.
“In the first quarter of FY2021, TM’s fixed broadband subscribers rose by 110,000 on a quarter to quarter basis as an impressive 175,000 increase in unifi users to 2 million was partly offset by a 65,000 decline in Streamyx to 492,000. This was the highest ever increase in unifi users – 8.3 times Maxis’ 21,000.
“Given TM critical role in the MyDigital initiative with its ownership of the high-speed broadband network, we expect a faster pace of growth for its wholesale revenue beyond for financial year 2021 forecast,” said the investment bank.
Likewise, it said, TM One’s revenue growth could also accelerate with the group’s appointment as the sole Malaysian cloud provider for government data.
Hence, AmInvestment Bank is keeping a “buy” call on TM with an unchanged discounted cash flow-based fair value of RM7.10 per share based on a weighted average cost of capital of 6.2 per cent, terminal growth rate of two per cent and neutral environmental, social, and governance rating of three stars. ― Bernama