RHB: Time dotCom high growth to continue, FY13 sales 30% higher

by **hlk** Tue 21 May 2013, 13:30

Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Tuesday, 21 May 2013 11:46
A + / A - / Reset

KUALA LUMPUR (May 21): RHB Research said it believes
telecommunications provider TIME DOTCOM BHD [] should see a
continuous high growth in its its wholesale business and rising sales in
the Unity cable.
Thus in a note today, the research house kept its “buy” rating on Time
dotCom Bhd (TdC) with an unchanged target price of RM4.95.
At 11:27 am, TdC was up by two sen to RM4.49 on a trade volume of
670,600. The counter had earlier hit a high of RM4.51.
“We like TdC for its high earnings growth potential against a backdrop
of increasing demand for bandwidth capacity in Asia Pacific,” said RHB
analyst Lim Tee Yang in the note.
RHB forecast TdC’s revenue will grow to RM546 million this year, a
30.31% increase from RM419 million made by the company in the last
financial year ended December 31 (FY12).
The research house also estimated TdC’s recurring net profit for FY13
to be RM142 million. The figure is 9.55% lower from the previous year
due to the distribution of half of its 3.5% stake in DiGi.com Bhd to its
shareholders, as Lim explained to theedgemalaysia.com.
In the note, Lim said TdC’s management expects domestic data, driven
by its domestic wholesale segment, to continue growing steadily from
mobile operators with the introduction of Long-Term Evolution (LTE) services.
“The rollout of LTE services opens up another revenue opportunity to TdC in the form of node fiberisation installation
contracts. While management guided that it is non-recurring, we believe it is possible TdC may procure more of such
contracts albeit possibly on a lumpy basis as the mobile operators continue to fiberise their backhaul for LTE services,” RHB’s
Lim commented.
He also said TdC’s management has planned for regional expansion initiatives, “and hinted it may be done inorganically”.
“TdC has identified Thailand, Indonesia and Philippines as countries with potential,” said Lim.
He added that the company will not have an issue to fund for its initiatives, as it has an under-geared balance sheet.