TELEKOM REVISED TARGET PRICE

Telekom Malaysia (RM3.44; Hold; Price Target: 3.45;) 
May raise dividend post-FY10
Telekom Malaysia (TM) CEO said that TM would consider the possibility of raising dividend after FY10F. We view this positively as it reinforces our view that TM’s investment into the HSBB (high speed broadband) network would not affect its cash position nor hamper TM’s ability to meet its dividend commitment of 20 sen/share.

We are keeping our forecasts and DCF-based price target of RM3.45, as well as our HOLD call on the stock. The share price had risen >10% since we upgraded TM in Jan10. We would like to see how consumers respond to its newly launched HSBB services before considering re-rating the stock.
source: HwangDBS Vickers