Nomura Equity Research raised its target price on Axiata Group Bhd to 7.60 ringgit from 7.10 as it expects the telecom company's operations in Indonesia, XL Axiata, to turn around next year.
XL is expected to contribute positively when it completes a $4 billion network ramp-up, which has raised costs and shrunk profit margins.
Nomura said the investment was "critical" for XL to transition into data, although competition may be more intense with new players coming into the fray.
Nomura maintained a 'buy' call on the Axiata stock, which has gained nearly 4 percent in the past month.
The stock was up 0.15 percent at 6.67 ringgit at 1027am (0227GMT), while the benchmark index rose 0.37 percent.
1030 (0230 GMT)
(Reporting by Al-Zaquan Amer Hamzah; Editing by Subhranshu Sahu)