• Overview. On a QoQ basis, TIME dotcom (TIME) 3Q22 PATAMI was up by 16.8%YoY to RM119mn on the back of an improvement in recurring revenue, particularly data and data centre, retail and wholesale. TIME cumulative PATAMI also increased or by 14.9% YoY to RM329mn thanks to better contributions across all segments and from data and data centre. 9M22 PBT also grew or by 13.5% YoY due to higher share of profit from associates and higher interest income.

• Key highlights. TIME’s data and data centres revenue recorded double-digit growth YoY in 9M22 to RM868mn (+12.1%) and  RM241m (+22.1%) primarily due to higher recurring revenue from retail and wholesale, followed by enterprise customers. Moving forward, we expect data and data centres to continue with their steady contribution consistent with TIME continuous effort to expand its data centre business across Asia.

• Against estimates: Inline. TIME’s 9M22 PATAMI of RM329m came in within our and consensus’ estimate, making up 75.8% and 79.4% of our full year forecast respectively.

• Outlook. We remain upbeat on TIME business prospects given its positive long term outlook. As such, we expect earnings to grow at a  3-year CAGR of 13.5% over 2021 – 2024F owing to strong demand for data and data centres, both from retail and enterprise segments.  Aside to that, we are positive with TIME’s partnership with affiliates of Digital Bridge Group Inc. as this will boost TIME’s data business in  Asia particularly with increasing demand for data consumption.

• Our call. Maintain our BUY call with a DCF-derived TP of RM6.65  (WACC: 6.4%; g:1.0%).

Source: BIMB Securities Research - 30 Nov 2022