Time’s 1HFY15 results were in line with our expectations but ahead of the consensus full-year forecast. Maintain NEUTRAL with a MYR7.15 TP(26% upside) pending its results call. Its share price hit a new high of MYR7.22 in Jul 2015 before retracing 22% during the recent broad market sell-down (YTD: +16%). We believe Time’s fundamentals are intact with global bandwidth sales benefitting from the USD strength.

Broadly in line. Time dotCom’s (Time) 1HFY15 EBITDA grew a robust28% YoY, driven by revenue growth of 17% (see Figure 2). This more than offset its higher depreciation charge (+9%), driving the 46% core PBT growth to MYR86.4m. 1H15 core PBT (stripping out the gain from the disposal of Digi (DIGI MK, BUY, TP: MYR6.60) shares in Apr and May 2015 (MYR274m), gain from a compulsory disposal of land to the Government (MYR2.4m), dividend received from Digi worth MYR4.2m and a forex gan (MYR3.9m) was in line, at 51% of our full year forecastbut ahead of the consensus estimate at 55%, on stronger non-recurring global bandwidth sales (GBS) of MYR42.6m in 1HFY15.

Weaker QoQ. Time’s 2Q15 EBITDA fell 14% QoQ due to higher-margin non-recurring GBS sales recognised in 1Q15 totaling MYR31.6m, which explained the 4% drop in EBITDA margin.

Myanmar in the bag. Time recently acquired a 25% stake in Campana Group for USD1m (MYR4.2m), which is in the process of laying the 1,603km Myanmar-Malaysia-Thailand Internet Connectivity (MYTHIC)cable through Myanmar. We are positive on the acquisition, given theburgeoning mobile data growth in Myanmar from expanding 3G take-up.

Forecast maintained pending the results call later today. Key risks to our earnings are: i) delays in the commissioning of new cables, ii) strongerthan-expected erosion in bandwidth prices, and iii) forex volatility.

Maintain NEUTRAL. Time’s share price hit a new high of MYR7.22 in Jul 2015 before easing to MYR5.66 (YTD: +16%) due to the recent market sell-down. Our SOP-based MYR7.15 TP values the core operations using DCF (WACC: 9.1%, TG: 1.9%) plus potential dividends worth MYR0.80 based on RHB’s TP of MYR6.60 for Digi.