Journey to Wealth
Telekom Malaysia - Good set of 2Q12 results
Period 2Q12
Actual vs. Expectations
The 1H12 core NP of RM406m came in above expectations and accounted for 56.3% and 54.2% of ours and the street's full-year estimates.
Dividends Declared an interim single-tier dividend of 9.8 sen with the ex-date on 12 Sept. For FY12, we expect TM to declare a total 50.1 sen in dividends (20.1 sen annual dividend + 30.0 sen special dividend).
Key Result Highlights
YoY, revenue rose by 10% to RM4.8b, driven by higher contribution from all its segments i.e. Voice (+1%), Data (+6%), Internet (+22%) and other telco related services (+24%). Reported EBITDA grew by 7% to RM1.58b although the margin dipped by 1.2pp to 32.5% due mainly to the higher direct and maintenance costs.
QoQ, the turnover was up by 2% due to the increase in the Internet (+3%) and other related services (+10%) but this was partially offset by lower revenue from the Data (-2%) and Voice (-0.2%) divisions. Despite the moderate increase in revenue, the core NP jumped 22% due mainly to a forex loss vs. a forex gain in 1Q12.
Unifi's subscribers grew by 22% QoQ to 384k at the end of 2Q12 with a blended ARPU of RM181 (-RM1 QoQ). To date, Unifi's subscribers have reached more than 420k on the back of 1.23m premises covered in 81 exchange areas. This translates into a take-up rate of 33%. Streamyx subscribership on the other hand, dropped by 1.9% to 1.63m (ARPU was maintained at RM79).
Outlook No change in its FY12 headline KPIs target despite recording the good set of results (Rev.
+5.0% YoY and EBITDA margin at 32%).
Change to Forecasts
We have raised FY12, FY13 and FY14 core NP by 10.4%, 4.3% and 0.2%, respectively, to RM797m, RM830m and RM851m after lowering 1) the direct cost (from 18.5% to 18.1% as a % of sales) and 2) marketing cost (from 5.5% to 4.3%) and 3) the effective tax rate (from 23% to 22%).
Rating Maintain OUTPERFORM
Valuation In tandem with the earnings upgrade, we have raised our TP to RM6.45 (from RM6.36 previously) based on an unchanged targeted FY13 EV/forward EBITDA of 7.6x (+2 SD).
Risks A potential slowdown in broadband subscribers and persisting margin pressure.
Source: Kenanga
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
