August 30, 2021

2021 First Half Profits Soar, TM Shares 'Show Stripes'!

 Telekom Malaysia Bhd (TM) 's share price recorded an increase in the trading session on Bursa Malaysia today after announcing a surge in profits for the first half of the year ended June 30, 2021.

TM showed an increase in net profit of 27.3% to RM544.06 million from RM427.27 million in the same period last year.

Meanwhile, the company's revenue also increased to RM5.57 billion from RM5.15 billion.

As at 12.28pm, TM's share price rose nine sen or 1.49% to RM6.15 with 2.3 million shares changing hands and seeing growth of around 13.3%.

TM has also raised a market capitalization of RM23.21 billion.

However, net profit for the second quarter declined slightly but TM remains optimistic that the company is still on track to reach its 2021 target.

CSG-CIMB Research maintained its forecast based on an adjusted yield valuation and raised the target price (TP) for TM shares to RM7.50 from RM7 previously.

CSG-CIMB added, EDITBA's margin contracted to 2.9% quarter-on-quarter to 37.2% driven by other higher rates.

It was also influenced by direct opex (higher deck installation and customer acquisition costs due to increasing Unifi subscription growth) as well as workforce optimization costs of around RM80 million.

At the same time, TM is associated with a voluntary separation scheme (VSS) implemented in the quarter that has a payback period of slightly more than one year.

"This will lead to fixed cost savings in the future," said CGS-CIMB.

In addition, it plans to continue implementing VSS in the coming year under TM's new transformation program.