KUALA LUMPUR (March 5): The telecommunications sector is poised to continue offering attractive dividends, following a robust fixed revenue growth and stabilising mobile earnings in the fourth quarter of 2025 ended Dec 31 (4QFY2025), according to CIMB Securities.

The research house noted that Telekom Malaysia Bhd (KL:TM) surprised positively with a dividend per share of 18.5 sen during the quarter, translating into a payout ratio of 69%, its highest since 2018.

The research house noted that Telekom’s action signals its intention to better manage its capital structure. 

“TM [is] poised to raise dividend payout ratio for FY2026–(FY20)27F, owing to strong cash flow generation and underleveraged balance sheet,” it further said in a note on Thursday.

In contrast, although TIME dotCom Bhd (KL:TIMECOM) posted their strongest earnings per share growth of 11% year-on-year (y-o-y), its dividend payout disappointed, which is only 27.1 sen due to the group extending its net debt/earnings before interest, taxes, depreciation, and amortisation (Ebitda) target timeline to two- to three years compared to one- to two years before that.

For Maxis Bhd (KL:MAXIS), CIMB Securities stated that based on its forecast on the group’s dividend yields between 2026-2028 of 18-19 sen, the group is expected to offer decent dividend yields.

The research house also projects the industry's mobile service revenue to grow 1.8% y-o-y in 2026, while fixed services are expected to expand 3.6% y-o-y.

CIMB Securities has maintained its “overweight” call on the telco sector following a robust 4QFY2025, highlighting Telekom as its top pick with an unchanged target price of RM8.20 and a “buy” call for potential dividend upside and data centre value creation.

It also upgraded CelcomDigi Bhd (KL:CDB) from a “hold” call to a “buy” with an unchanged target price of RM3.85, citing attractive valuations after a 15% share price decline over the past year.

For TIME dotCom, it downgraded the group from a “buy” to a “hold” call, with a slightly increased target price of RM6.20 due to the group’s fair value. 

Lastly, it maintained its “buy” call on Maxis, with an unchanged target price of RM4.55.