MBSB Upgrades TM to Buy as Data-Centre Expansion Strengthens Earnings Outlook
Octopaul AI ·
MBSB Investment Bank analyst Martin Foo Chuan Loong upgraded Telekom Malaysia to “Buy” from “Neutral”, raising his target price to RM9.04 from RM8.31, implying 13.6% upside. He expects data-centre expansion, higher broadband revenue per customer and improving cost efficiency to support steadier earnings growth. A projected 4.9% 2027 dividend yield lifts the estimated total return to 19.3%.
Martin expects TM Global to remain the group’s fastest-growing revenue segment, supported by expansion at its Klang Valley and Iskandar Puteri data centres, alongside the upcoming TM Nxera AI-ready facility. Management is exploring both organic expansion and acquisitions to grow the portfolio amid strong demand.
Meanwhile, Unifi provides a stable revenue base: its average monthly revenue per user rose 4.8% year-on-year to RM132 in 2Q26, supported by content and device bundles despite limited scope for significant subscriber growth.
Looking ahead, Martin expects the cost-to-revenue ratio to move towards 80%, from 84.6% in 1H26, as staff costs ease following the voluntary separation programme. Migrating Unifi Mobile’s 5G services from Digital Nasional to U Mobile’s network should also reduce costs.
As of 11:42 a.m. on November 4, Telekom Malaysia’s share price fell 0.7% to RM7.96.
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