Time dotCom plans to expand fibre footprint from proceeds

PETALING JAYA: TIME Dotcom Bhd plans to expand its fibre footprint from its more than 1.3 million premises by using about RM1bil from the proceeds of its partial stake sale in AIMS Group.

There are also good opportunities for the regionalisation of the company’s data centre (DC) business, leveraging on strong enterprise demand for DC co-locations and cloud services, according to RHB Research.

The research house is upbeat about the company’s prospects, premised on structural drivers (data centres, fibre broadband) and strong commercial execution.

It added that the company’s result for the second quarter ended June 30 were broadly in line along with another positive being the special dividend declared.

“The stock offers a double-digit two-year earnings compound annual growth rate, with a solid net cash balance sheet. This vindicates the valuation premium over domestic peers,” said RHB in a note to clients yesterday.

Meanwhile, UOB Kay Hian (UOBKH) Research said the special dividend demonstrated the company’s commitment to rewarding shareholders with attractive dividends while driving growth for the company. It said for full-year 2023, it had projected only 66.5 sen per share, including a special 54.4 sen per share dividend per share (DPS) paid on May 23.

In view of its net cash position of RM1.5bil and sustainable earnings before interest tax depreciation and amortisation of RM700mil to RM800mil annually, UOBKH Research has raised its 2023 to 2024 DPS outlook.It expects 2023 to 2024 net DPS of 32 sen per share, translating to a net dividend yield of 6%.

The research firm also expects the company to replenish the loss of revenue from the AIMS stake sale within 18 to 24 months.

Recall that the company had announced that the profit earned from the closure of a strategic partnership related to AIMS was worth RM2.26bil.

“There is also a possibility that management can grow the core retail, DC and wholesale businesses quickly enough to ‘patch back’ the loss of revenue in a year.

“The group continues to experience strong growth in retail, wholesale, DC and cloud computing segments,” UOBKH Research added.