RHB Research said the telecommunication group’s FBB exposure currently covers 1.5 million to 1.6 million premises, with management eyeing 200,000 to 250,000 additions per year.
PETALING JAYA: TIME Dotcom Bhd
(Time) is looking to speed up the expansion of its fibre broadband (FBB) footprint where there is still significant room for growth notwithstanding competition from incumbent players, says RHB Research.
The research firm said the telecommunication group’s FBB exposure currently covers 1.5 million to 1.6 million premises, with management eyeing 200,000 to 250,000 additions per year.
“Based on a guided addressable market for multi-dwelling units of around three million (compared with over seven million for landed residential properties), there is still significant room to grow the FBB business, notwithstanding competition from the incumbent and/or new access seekers,” said RHB Research in a report.
Commenting on Time’s results for the third quarter ended Sept 30, 2023 (3Q23), the research firm said it tracked with the firm’s and consensus estimates of double-digit top line and earnings before interest, taxes, depreciation, and amortisation (Ebitda) growth year-to-date.
“The 3Q23 core earnings rebounded 6.1% quarter-on-quarter (q-o-q) on higher Ebitda margin, following the divestment of the data centre business in April.
“This brought nine-month core earnings to RM302mil, at 68% of our forecast (consensus: 67%), within historical run rates with a seasonally higher December quarter anticipated,” it added.
The research house said the group’s growth continued to be spearheaded by the retail FBB segment, followed by enterprise and wholesale. Product-wise, cloud and solutions revenue grew 4% q-o-q, largely driven by subsidiary AVM Cloud, which accounted for about 12% of group revenue.
RHB Research, which has a “buy” call on Time, said the stock remains one of its preferred sector picks. “We continue to like the stock as a strategic infrastructure play. The group’s appeal lies in management’s execution prowess, earnings quality and the solid balance sheet,” it added.
Its target price for the stock is RM6, a 16% upside and about 4% financial year 2024 yield.
