KUALA LUMPUR: TIME Dotcom Bhd
's 2017 results were below expectations owing to a drop in IRU sales and forex losses due to the weakened US dollar, according to Maybank Investment Research.
The telco's net profit of RM36mil was down 32% year-on-year, bringing first half of FY17 net profit to RM89mil, representing 38% and 39% of Maybank Investment Research's and consensus full-year forecasts. As expected, no dividend was declared for the quarter.
"The low IRU Q2FY17 sales means H1FY17 data revenue (+23% YoY) is currently trending below our expectation. We are relatively unperturbed given 1) the continued strong growth momentum of its retail product and 2) the potential resumption of IRU sales in H2FY17 given the impending commissioning of the AAE-1 cable.
"Data centre has been trending slightly ahead of expectation, with revenue growing 27% year-on-year in H1FY17, due to increased utilisation of the recently-expanded KL site," the research house said in a report on Tuesday.
Maybank Investment Research maintains its Hold call, earnings forecast and target price of RM8.90 for Time dotCom.
"TDC’s ASEAN expansion plan is taking shape, and its easing capex schedule would mean greater leeway for management to pursue more M&A opportunities. Nevertheless, with the stock trading close to peak valuation (premium to peers), we think TDC’s growth prospects have largely been priced-in," it said.
In early trade, Time dotCom fell 29 sen or 3% to RM9.37 on the back of 1,700 shares done.
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