PETALING JAYA: TIME Dotcom Bhd
’s cash pile and high dividend payout rate makes it a yield stock worth considering in a volatile market environment.
Maybank Investment Bank Research (Maybank IB) stated that the telecommunications company offers a 5% yield to investors based on a 100% dividend payout rate.
The fibre optic infrastructure owner and service provider had over RM1bil in cash at the end of December 2024 and lower than expected capital expenditure (capex) in financial year 2024 (FY24), which saw management distributing excess cash to shareholders, the research firm said.
“With net cash levels still elevated, there remains ample room for further balance sheet optimisation.
“Under a hypothetical scenario of both elevated capex (RM500mil per year) and dividends (100% payout), we estimate Time would still be in a net cash position for the next three years,” Maybank IB wrote in a report on the company.
It added that Time’s management continued to prioritise the expansion of its fibre footprint amid tapering earnings growth, while taking an opportunistic stance towards new ventures.
While the home fibre broadband has been the main growth driver for Time in recent years, it appeared to show signs of plateauing and competition in the customer acquisition space has intensified due to aggressive discounting by mobile players.
Going forward, Time could potentially benefit from the deployment of the second 5G network, given its prevailing backhaul partnership with U Mobile Sdn Bhd, the research house noted.
The research house has maintained its “hold” call on Time with target price of RM5.10 a share, the valuation derived from a discounted cash flow method.
It added Time’s exploratory steps into rooftop solar and electric vehicle charging infrastructure are unlikely to be capex-intensive, with its management continuing to prioritise the expansion of its fibre footprint.
For FY25, Maybank IB expected Time to post core earnings per share of 25.3 sen and announce a dividend payout rate of 100%.
