Top Story : TM – Higher dividend, possibly Market Perform
Visit Note
♦ TM’s UniFi packages has registered a take-up of 600 households as of 5 Apr 10. Although most of these subscribers were previously Streamyx users, nevertheless, UniFi would generally help TM both in terms of customer retention and acquisition in the rollout areas over the long run.
♦ Net adds for broadband has improved yoy since Dec 09, thanks to lower churn rate and the introduction of the “super upgrade deal” since Nov 09. While the “super upgrade deal” would result in higher ARPU, the accretive effect would only be felt from May onwards.
♦ Management did not rule out the possibility of paying shareholders in excess of the minimum of RM700m dividend, but neither did management provide a firm commitment to do so. Between special dividends and a higher minimum dividend policy, we sensed management’s preference would be for special dividends.
♦ Indicative fair value remains unchanged at RM3.55, which is based on a required net yield return assumption of 5.5% on the minimum RM700m dividends.
RHB Equity 360°(TM, Infra, TNB, Axis REIT, Quill Capita, MAS, Gamuda, Formis; Technical: Faber) - 21/04/2010
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