Dato' Lau is smart. He's laughing to the bank.

1) OCK plans to acquire 1,100 towers in Vietnam in 2020, possible with new strategic partner (unlock of value toward end of Q2)
2) OCK forward for FYE2021 PE 15x vs peers of 25x, overall sector is positive despite pandemic
3) Implementation of NFCP RM21.6billion, OCK will benefit, despite temporary delay due to MCO
4) One of the report mentioned, almost 70% of revenue from recurring biz, that's good especially we are facing "recession" in a year or two.

1HFYE20, almost 85% dividend payout for 1H. Interesting. Distribution segment should be doing well.

I notice a fundamental flaw lately in a research report using the diluted number of shares (after warrant conversion) of 1.135b shares without including RM187m of sales proceeds from the warrant conversion. TP will be 81 sen instead of 65 sen. (Analyst may be conservative, but should also be realistic, its like calculating a share price (ex-rights) including rights issue shares, but does not include the proceeds from rights issue)

today volume is good, 5x more than average.

Perhaps good news from coming 1Q + good prospects for solar expansion + towerco tenancy. More importantly they are growing its recurring income above 50% (very crucial during economic slowdown), to have recurring and growing towerco rental and solar tariff. A research report said OCK is eyeing 20MW solar with 16 years remaining concession (more than double its existing size ownership of solar PV), if bought at reasonable price will add value to OCK besides its towerco biz.

this year allocation of spectrum for telcos, positive for telco services like OCK + NFCP as well. After gloves, oil and gas, solar, what's next?

OCK will only move after the announcement of spin-off to private equity, nobody knows how soon.

"Since the start of MCO until now, he has disposed off more than 13mil shares" - YOU MAY HAVE TAKEN THE FIGURE TWICE, ACTUALLY SINCE MCO, HE DISPOSED ABOUT 6.5M (DIRECT AND INDIRECT - INDIVIDUAL AND COMPANY - SAME NUMBER OF SHARE DISPOSED) AND HE ALSO ACQUIRED DURING MCO ABOUT 1.4M shares, hence net disposal is 5.1M (most of it at a profit - if you take the lowest price he bought) - actually it is IMMATERIAL compared with a total where he owns more than 30%. It is only 5.1/984 = 0.5% of the total shares outstanding.

https://www.theedgemarkets.com/article/japanese-pe-firm-incj-weighs-selling-stake-axiata-tower-arm

INCJ took up the private placement (EV to EBITDA of 12.5x based on FYE2016 of edotco) in 2017 @ USD400m , now, expecting at least USD500m for disposal. OCK's towerco EBITDA around RM80m.

price will only move up when towerco biz is unlocked, hopefully before end of May 2020.

http://www.insage.com.my/ir/cmn/AnnouncementAlert.aspx?NewsID=202005055000003&Symbol=0172&Theme=99

interesting info. Would be great after you extrapolate it to 20 March 2020, to see how small cap vs big cap in the start of global recession, the above article information ends in 2018, is good, but is outdated and may not be useful anymore to make an educated financial decision.

If this happen, it will be a game changer, RHB did mentioned it can raise about RM150m-RM300m depending on the valuation. This will quicken the expansion plan in Myanmar and Vietnam, and improve earnings significantly.

something brewing? first time see this director cwy buy huge amount. could it be the divestment of part of towerco coming?

market cap (net of cash) = RM2.8b, yearly cashflow estimates = RM400m. Associate in Vietnam, although non cash flow, likely to touch bottom. As for Malaysia, increase consumer demand is satisfactory.

@slee, profit up about 17%. (MI Tech, PAT improved 34%, share price after announcement went up from RM2.00 to RM3.10, about 55%). Consider not bad as last 3 years before FYE19 is flat. Problem with company with capital intensive stocks, profit will only move after most of the loan is repaid.

However, the only silver lining is the EBITDA is impressive, far higher than the research house estimate.

consensus vs actual, PATMI 29.9m vs 28.1m, EBITDA 114m vs 135m, PBV = 1.1 vs 1.1. Only EBITDA did better than consensus. EBITDA is important because big chunk of it is towerco, which the value depends on the size of EBITDA, which OCK trying to unlock. The question is when?

@myinvestor,
Substantial Shareholders (extracted from Annual Report 2018)
As per the Register of Substantial Shareholders
Shareholdings
Name of Directors Direct % Indirect %
Aliran Armada Sdn. Bhd. 244,415,950 28.045 – –
Lembaga Tabung Angkatan Tentera 107,893,425 12.380 – –
Employees Provident Fund Board 62,146,800 7.131 – –
Ooi Chin Khoon 195,000 0.022

Your list, shows Aliran has 330.177m, an increase of 85.8m shares

@myinvestor, thanks for the update on top shareholders, its good positive news from substantial shareholders' perspective

OCK needs a good "psychiatrist" instead of a "surgeon" as it is nothing wrong "physically" but a "perception" issue. Hope this unhealthy debt "perception" will be removed once an for all when the private equity unlock some of the value in the towerco biz. Management speed of execution will determine with OCK's fundamental and stock performance.

chartwise looks ok, as long as above 60 sen. Was inform, qtr out soon. Today 1 gainer 3 losers, NYSE futures in red. may be good for warrants trading.

FYE19Q4 is likely be good if not great, as mentioned in their previous quarters & analysts reports. The tenancy ratio for both Vietnam and Myanmar is improving qtr to qtr. If their solar also able to improve, then, it will be great.

The RM200m question is when will the Private Equity participates in OCK’s towerco.

Let's hope that 5G wave can sustain for at least 3-6 months.

If research houses assumed no conversion of warrants, the TP is above 90 sen. I believe what RHB research is trying to say is first divestment for towerco is to sell partly to Private Equity, then, try to list it within 2 years. This exercise is critical, as the rerating of the company depends on it.

<SOLAR> Typical solar PV is 6-7 years payback period. In the PPA, tariff is fixed, normally for 21 years from SEDA. Older PPA has higher tariff as the cost of construction is much higher. As long as we do not have the details, it is not possible to evaluate whether they over or under pay. LSS3 estimates the cost of construction is about RM4m per MW (RM2.0b for 500MW).

<If we looked at the research report, the research houses used the enlarged capital after conversion of warrants to arrive at the target price, say 75 sen. However, it did not take into account the proceeds from the conversion, about RM187m, which is worth another 16 sen. Hence, the adjusted TP should be 91 sen>

<The spinoff to the PE will also bring in 15 to 20 sen per share, timing is essence for their warrants conversion>

Towerco worth approx RM750m
Solar & EPC Solar worth about RM200m
Telco services and maintenance RM50m-100m
Engineering & trading RM100m
(Estimates)

1) This stock needs more analysts to cover. EBITDA of towerco is RM70+ million x multiple of 11 = RM800m. Edotco did it at multiple of 12.5x (for reference). No towerco is listed on Bursa, basically operating cash flow is much better than P&L. It it more appropriate to use EBITDA to value towerco, which is the market practice.

2) Older solar pv cost ranges from RM8-10m (50-60% more expensive against new solar pv, but with higher tariff), assuming they bought 3MW plus (Green Leadership). Solar payback period is about 7 years.

Both towerco and solar is capital intensive (spent RM600m plus, but provide long term sustainable cash flow).

Hopefully they will secure the contract by January 2020.

Looks like the RM32m acquisition received lukewarm reply. No details on any recurring assets, like ownership of any solar farms, contracts or prospects. Hope they have other exciting news coming.

The announcement is too vague.

EPF buy sell volume not recorded as part of the normal volume (Not sure why). Although the execution is slow, let's hope they get a better deal in their negotiations. RHB believes the spin off of towerco can bring in about 20-30 sen. Perhaps, they try to do it together with the purchase of additional1,000 towers in Vietnam.

Gadang paid 90 sen each for 20 mil shares. RM18m invested. If not possible, why waste so much?

If they gets ECRL contract, potential is above RM1.00/- So, if you are confident they get it, then 40 sen is good price.

Myanmar revenue is RM65m. EBITDA 65%. Not bad for 20 years lease.

Dividend yield about 5.5% p.a. Based on latest few quarters, cash flow is growing double digits despite associate in Vietnam not performing. Based on this round dividend, it is higher than yoy, 17 sen vs 15 sen, hence the balance div is expected to be higher too. Cash position is crazily high at RM1.2 bil, special dividend is not impossible.

ttt@ about 30 trading days only. The Company does not have sufficient coverage by research houses, even though it is 70% held by institutional (including major shareholders) and research house is not experience in towerco biz;

ttt@, one to three months?

Christmas sale today. 59/9.5 = 6.2x. Grab some WA. Was informed they will spin off part of the subsidiary, can fetch about 10-12x EBITDA multiple. This may be a good catalyst.

Since 2016, OCK has spent about RM600m on Capex, net debt increase about RM300m, that sounds reasonable.

One of Unicom's subsidiary is listed in HK with market cap of USD210 billion (HKD6.68), and a month ago the company is above RM1.0 trillion (HKD8.50). Good news.

1) Good news, domestic market up 24% or RM20m in profit (RM102m), cash balance up RM200m to RM1.2m, interim dividend higher at 17 sen vs 15 sen.

2) Bad news, associate, Yamaha Vietnam, dropped from about RM10m to RM7m (share of profit) vs previous year about RM24m, as motorcycled peaked in 2018 and Yamaha 2 new models yet so see results. And higher tax by RM5m

3) Overall, cash flow improve almost RM20m this quarter, more than enough to offset the drop of accounting share of profit to RM7m from RM24m. Dividend is expected to be better than last year, thanks to better cash flow. Est. 54 sen, at RM10.60, DY is 5.1%.

Once the MSCI funds sold down, the share price will recover, especially when the results improve over time. Same thing happen to Shariah funds disposal.

Spin off of towerco assets as mentioned by analysts soon? This will add about 20-25 sen to OCK Group, although research house 13-35sen. If this is the case, 20 sen is equivalent RM174m, good for further expansion.

1) Based on Bursa website detailed results, YoY is 21.5% and QoQ is 9.02% (not as shown above, opposite). This is better than analysts estimates.

2) Tower construction order is good, about RM130m.

3) EBITDA is better than analyst's expectation

4) Cash balance is low after net of pledge, as they have bulky trade debtors. Anyway, the latest PP has raised RM52m. And subsidiary is expected to have PP as well to third party.

EBITDA 2016 - RM60m, 2018 - RM100m, 2020E - RM120-140m. (For 2018, 60% of EBITDA is from tower assets which its earnings is sustainable and growing).

About 70% is held by financial institution (plus major shareholder). Last year was 74%, 4% being Shariah Funds, which was all sold down. Very low float, like many other Bursa stocks. Disregard the narrow price movements, the results will be good (based on expansion + better tenancy of tower biz).

With another private placement of the subsidiary OST in a month or two (unlock the value of its tower assets), it will allow the Group to expand further in tower assets. If we add up the capex for 3.5 years until 30 June 2019, the Group has spent about RM600m on tower assets, which is sustainable (5-15 years lease rental) and growing.

So, have to be patient for next one to two quarters at least, to see the positive results. Besides PAT, it is also important to monitor the growth of EBITDA (as the towers assets is valued by the market using EBITDA multiples). About 60% of the total EBITDA is from towerco biz, and it is growing.

@frank74 the placement price is 60 sen, not 55 sen. The EBITDA of OCK's tower assets only for 2019/2020 is about RM70m. Depends what multiple they can get, conservatively 10-12 times. Not included is the engineering biz and green energy assets.

Cost today 58 sen is below placee price of 60 sen. Previous placement in 2016 is 81 sen. Interesting. Of course, no placee(s) wants to incur losses, especially RM50m and with holding costs.

Let's see how it works out. It may be an opportunity. More importantly, EBITDA is growing fine from RM60m to RM100m (in 2 years), and estimated to be RM122m (FYE20) by analyst. I believe they can do better than analyst estimate, with Solar and Tower expansions.

And also getting good value from the subsidiary placement in one or two months.

PP is issued at 60 sen. One of the analysts has a TP of RM0.75 per share on the pretext of
PATMI is RM28.5m and RM33.0m for FYE19 and FYE20 respectively.

Similarly, EBITDA is expected to grow from RM99m to RM108m (FYE19) and RM122m (FYE20).

Of course, those are estimates. However, based on the growth of number of towers & improved tenancy ratio, especially total number has expanded from about 3,000 towers to 4,000 towers. The increase in towers are from Myanmar (300), Vietnam (600), and Malaysia (100) towards last quarter of FYE18 will give OCK a boost to its earnings and EBITDA.

Hopefully they can achieve earnings growth of 20-30% for cumulative 9 months, from the increase in towers and also some secured contracts. Results may be out by end of next week.