KUALA LUMPUR: RHB Investment Research said TIME Dotcom Bhd
's share price weakness has priced in downside risks and expects the slowdown in the wholesale business to taper off in 2H18.
The research house said Time dotCom's 1Q18 results were within expectations with core Ebitda meeting its and consensus estimates.
"We raise our FY18-20 core earnings forecasts by 7-9% to factor in MFRS 15, having reviewed our revenue and margin assumptions," it said.
RHB said overall revenue fell 2% on quarter with declines across all segments but was up 5% on year with the fall in voice and other revenues offset by growth in data centre revenues.
Retail revenue was up 76% on year due to strong take-up of fibre broadband plans and higher premises passed.
"Growth should continue to be fuelled by additional 200,000-250,000 new premises targeted by end-2018, and the addressable market of up to 1m premises in 2-3 years," said RHB.
However, wholesale revenue was down 19% on year as it continued to be affected by new sub-sea vable/capacities commissioned over the past 12 months and over-the-top players reappraising their commitments.
"We expect the demand-supply imbalance for the wholesale business to normalise in 2H18 or early 2019," it said.
RHB upgraded the counter to buy from neutral with a target price of RM8.55 from RM8.45 previously.
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