Telekom Malaysia - Eyeing P1?

Date: 
2012-10-19
Firm: 
KENANGA
Stock: 
TM
Price Target: 
6.45
Price Call: 
BUY
Last Price: 
6.84
Upside/Downside: 
-0.39 (5.70%)

News   Business Times reported that Telekom Malaysia ('TM') is seeking approval from the Finance Ministry to make a RM1.8b bid for Green Packet Bhd's wireless broadband unit, Packet One Sdn Bhd ('P1'). Green Packet was the first company to launch commercial WiMAX services in Malaysia via P1.

Thus far, YTL Corp's Yes mobile and U Mobile, a company linked to Tan Sri Vincent Tan, had also been touted as possible suitors of P1.

Comments   We are surprised by the news as TM had earlier indicated that it is only interested in fixed line and fixed line-related operations.

We managed to contact TM's management after the news. According to management, TM has no intention to acquire P1 at this juncture and the news reported by Business Times was purely speculative.

We understand that management will issue an official statement today to deny the rumours.

Outlook   TM's outlook remains solid despite the escalating competition in its home broadband segment.

Forecast   No changes in our FY12-FY14 earnings forecasts.

Rating   Maintain OUTPERFORM
TM continues to be our top pick in the telco sector due to its strong dividend yield, solid presence in the fibre-to-the-home market and lesser competition seen in its wholesale and fixed-line segments.

Valuation   Maintaining our Target Price at RM6.45 based on a targeted FY13 EV/forward EBITDA of 7.6x (+2.0 SD).

Risks   Higher than expected capex may affect our FY12 dividend assumption, where we are expecting TM to announce another capital initiative plan given its declining capex trend.

Source: Kenanga
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njue76

OTHERS ARTICLE ENTITLED “TM COME A-CALLING FOR P1” IN BUSINESS TIMES, THE NEW STRAITS TIMES DATED 19 OCTOBER 2012
TELEKOM MALAYSIA BERHAD
19/10/2012 12:38:24 PM

Type Announcement
Subject OTHERS
Description ARTICLE ENTITLED “TM COME A-CALLING FOR P1” IN BUSINESS TIMES, THE NEW STRAITS TIMES DATED 19 OCTOBER 2012
We refer to the above news articles appearing in Business Times, The New Straits Times on 19 October 2012, with particular reference to the sentences reproduced as follows:-

“Telekom Malaysia Bhd, the country's biggest phone company, is seeking approval from the Finance Ministry to make a RM1.8 billion bid for Green Packet Bhd's wireless broadband unit, Packet One Sdn Bhd (P1). Business Times understands that the company sought the approval yesterday.”

Telekom Malaysia Berhad ("TM") wishes to highlight that the article is misleading as it is based on speculation. TM has not announced any interest to bid for the stake nor seek any approval to do so.

TM is however always in search of value creating opportunities as part of our strategy and rest assured, will make any necessary announcements to our stakeholders, where so required.

TM has written to Business Times ("BT") and requested that clarification to be published for the benefit of BT readers and public at large.


This announcement is dated 19 October 2012.

2012-10-19 14:41

Ben Gan

I have invested in TM and benefited. I think TM can be trusted.

2012-10-19 14:47

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