FIGURE 1: TIME DOTCOM BERHAD LAST 5 YEARS SHARE PRICE TREND

 

**analysis based on 2018 annual report.

1.       GENERAL INTRO: Time Dotcom Bhd is a telecommunications company that offers fixed-line and enterprise services, including data (broadband and wireless), voice, and data center services, where the majority of revenue comes from. The company divides its customer base into three segments: wholesale, retail, and enterprise. Retail and enterprise deal with households and companies, respectively. The wholesale segment provides backhaul services to Asia-Pacific and Malaysian telecommunication companies. This is enabled through the company's ownership of telecommunications infrastructure, specifically a fiber-optic cable network.

 

2.       NOTABLE POINTS:

a.       from 2018 report, business segments include telephone fixed-line, international bandwidth provider and data centres

b.      serves more than 600,000 premises in Malaysia

c.       data centre has >74,000 square feet of data centre space in Malaysia and >36,000 square feet in Thailand and Vietnam

d.      Time dotCom has retained its AA3 credit rating from Rating Agency Malaysia for the 3rd consecutive year

e.      CAPEX: Increase of property, plant equipment of RM148.9 million from the purchase of global bandwidth assets, data centre equipment as a result of expansion and freehold land

 

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~983.4 million in 2018 annual report, this is a high revenue company.

b.      SHARE PRICE: from 2015-2019, share price share price increasing from around RM5.00 to around RM9.00

c.       EARNING PER SHARE (EPS): earning per share in last 5 years increased from 30.34 to 49.13sen

d.      FUTURE POTENTIAL/PROSPECTS: quite dependable and reliable counter, share price expected to be stable.

e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 148.9 million, around 4% of total assets.

 

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2018 report, TIMECOM declared a total dividend payout of 20.56 sen per share, amounts to dividend yield of 2.23 % based on current share price.

b.      CONSISTENCY: consistent dividend payout, last five years (2015-2019) dividends declared range between 17 to 20 sen per share.

c.       DIVIDEND PAYOUT RATIO: in 2018 financial year, TIMECOM paid out about 37% of its earnings to investors in the form of dividend. The dividend payout ratio is constant at around 40% of earnings in last five years.

 

5.       IS THE MANAGEMENT PERFORMANCE GOOD?

a.       RETURN ON EQUITY (ROE): in 2018 financial year, TIMECOM achieved a reasonable return of shareholders’ equity, at 12%. Last five years ROE range from 7 to 12%.

b.      COST-TO-INCOME RATIO: cost-to-income ratio is high at about 222%.

 

6.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around RM 389.4 million, equivalent to RM 0.67 per share

b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is very well supported by institutional investors, there are 30 institutional investors at top 30 major shareholders list, including EPF (8.06%) and PERMODALAN NASIONAL BERHAD (0.36%), SKIM AMANAH SAHAM BUMIPUTERA (3.43%), KUMPULAN WANG PERSARAAN (7.19%), KHAZANAH NASIONAL BERHAD (11.19%), PULAU KAPAS VENTURES SDN BHD (30.35%), insurance companies and investment funds.

 

Disclaimer: The content of the blog posts are for sharing purpose only. Readers are encouraged to carry out further research and analysis as well as follow up latest update information before making any investment decisions.

 

 

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