• OCK is the largest telecommunication service provider in Malaysia. It primarily focuses on the building and renting out of telecommunication towers. OCK is expected to continue benefiting from the rapid network expansion plan undertaken by the local major telcos as well as growing its recurring revenue business via own-build and acquiring existing tower-sites operators in ASEAN, underpinned by its regional business in Indonesia, Cambodia, Myanmar and later in Vietnam. This will be more apparent after the completion of the acquisition of 60% of Southeast Asia Telecommunications Holdings Pte Ltd (SEATH) in 2017, which owned 1,938 towers throughout Vietnam.

• Apart from focusing on the telecommunication business, the group is also sourcing for more business and/or investment opportunities in the sustainable energy sector that is rapidly growing in demand.

• Mild signs of bottoming up. Following the 8.7% retracement from 52-week high of RM0.86 (8 Aug) to RM0.785 (25-30 Aug low), OCK showed some mild signs of bottoming up as share prices inched up 1sen to close at RM0.795 on 30 Aug.

• We believe the stock is ripe for imminent technical rebound following the formation of Tweezers bottoms and a long-legged Doji patterns, signaling that selling pressure is starting to diminish. A decisive breakout above RM0.815 (23.6% FR) will spur prices higher towards RM0.86 and our LT objective at RM0.90. Key supports fall on RM0.785 and RM0.765 (200-d SMA). Cut loss at RM0.745.

Source: Hong Leong Investment Bank Research - 1 Sep 2016