TM in its latest earning report indicated the company is on course for record earnings as its 3Q22 core net profit was in line with expectation (but above consensus) as earnings normalised from last quarter’s record high.
The group is on course to deliver record earnings in FY22 (despite Cukai Makmur). Maybank IG views the overall outlook remains favourable, with TM potentially benefitting from strong fibre uptake and ongoing cost optimisation.
Reiterating a BUY call and an unchanged target price of MYR7.80 was based on TM’s core net profit of MYR342m (+12% YoY, -24% QoQ) bringing 9M22 core net profit to MYR1,153m (+29% YoY), 84%/92% of FY22 forecasts. With 4Q earnings being typically weaker (from back-loading of project costs and year-end provisioning), the results were in line with Maybank IG’s expectations.
Revenue was up 2% QoQ with growth at both Data and ‘Others’ being offset by contraction at Voice. Internet revenue was up marginally by 0.2% as Unifi subscriber net additions tapered and ARPU contracted. Opex meanwhile was 8% higher as direct costs spiked, possibly from higher bespoke solution costs. The research house said this resulted in normalised EBITDA margin contracting by 3.0ppt QoQ to 39.9%.
In view of this Maybank IG management has raised its FY22 guidance to mid to high single-digit revenue growth (from low to mid-single-digit previously), EBIT of MYR2.3b (from >MYR1.8b previously). This essentially reflects the YTD run-rates, in our view.
