• Overview. On a QoQ basis, TIME’s PATAMI surged by 12.9% YoY to  RM124mn on the back of higher revenue growth, lower finance costs,  and lower tax expense. TIME’s cumulative PATAMI in FY22 also increased or by 14.3% YoY to RM454mn mainly due to better contributions across  all segments primarily data and data centre products. Nonetheless  looking at the margin in FY22, TIME’s EBITDA margin declined slightly by  1.2ppts due to higher depreciation on PPE. Aside to that, the group’s  capex was up by 66% YoY in FY22. Note that 65% of capital expenditure was spent to expand domestic network coverage and upgrade the  group’s existing network infrastructure including submarine cable related  investments. The remaining 35% was spent on data centre, namely on  AIMS Cyberjaya and other data centre assets

• Key highlights. TIME’s data and data centres revenue recorded doubledigit growth YoY in FY22 to RM1,190mn (+13%) and RM330mn (+10.0%)  primarily due to higher recurring revenue from retail, wholesale and  enterprise customers. Thus, moving forward, we expect data and data  centres to continue to record a solid growth.

• Dividend. The group declared an ordinary and special dividend of 12.33 sen and 2.36 sen per ordinary share respectively, bringing cumulative  dividend to 31.0 sen for FY22 (versus 21.0 sen in FY21) equivalent to a  yield of 6% based on current market price.

• Against estimates: Inline. TIME’s FY22 PATAMI of RM454mn came in  within our and consensus’ estimate, making up >100% for both.

• Outlook. We remain upbeat on TIME’s business prospects given its  positive long term data business outlook. Moving forwards, we expect  data and data centres contribution to remain significant owing to TIME’s  continuous effort to expand its data centre business across Asia.  Downside risk to our call includes strong competition from other service  providers, in terms of network coverage and varied services provided that  could affect the TIME’s business clusters.

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

Source: BIMB Securities Research - 1 Mar 2023