• Overview. 3Q19 core profit (pre-MFRS 16) grew 28% yoy and 6% qoq in tandem with higher revenue. This was mainly driven by strong data revenue, led by the retail segment.
   
• Key highlights. Data revenue surged 15% yoy to RM228m driven by the retail segment on strong demand for high speed home broadband packages due to competitive pricing. Management noted that the dilution in ARPU has started to stabilise in 2019.
   
• Against estimates: inline. 9M19 core profit (pre-MFRS 16) came in higher 18% yoy underpinned by the strong growth in data, wholesale and retail segment. Overall, 9M19 core profit were broadly inline with ours and consensus’ estimates at 80% and 78% respectively.
   
• Outlook. Despite the challenging telco industry, we expect TIME’s retail segment to remain robust backed by accelerating data demand. Besides, management guided on positive outlook in near term for wholesale segment coming from domestic and OTT players. 
   
• Our call. We maintain our BUY recommendation with an unchanged DCF-derived TP of RM10.00. We view TIME’s long-term outlook favourably given a growing customer base in retail, augmented by wholesale and enterprise segment providing earnings stability.

Source: BIMB Securities Research - 2 Dec 2019