• From Malaysia to regional. OCK (listed in July 2012) is principally involved in the provision of telco network services (TNS), which is the bread and butter, contributing about 60-65% to revenue. Also, the group is embarking on acquiring/building tower assets in Myanmar, Vietnam, Cambodia and other parts of Indochina. Besides, OCK diversified into Green Energy and Power Solutions, an imminent and a rapidly growing industry in Malaysia.

• Steady growth ahead. According to consensus, OCK is expected to rake in 11% EPS CAGR for FY17-19, on the back of the steady 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 expansions in Indonesia, Cambodia, Myanmar and Vietnam.

• Poised for a triangle breakout. Following the 14.7% slide from 52-week high of RM0.985 (28 June) to a low of RM0.84 (5 Dec), OCK’s share prices are on the gradual uptrend to end at RM0.895 yesterday. We believe the stock is ripe for imminent triangle breakout after building its base near RM0.84 (61.8% FR). A decisive breakout above RM0.91 (downtrend line) will spur prices higher towards RM0.945 (29 Dec) and our LT objective at RM1.06 (flag formation breakout objective). On the flip side, failure to hold at supports near RM0.87 (50% FR) and RM0.84 will aggravate further slump to RM0.80 zones. Cut loss at RM0.835.

Source: Hong Leong Investment Bank Research - 16 Jan 2018