Good growth prospects for telcos Saturday, 23 Oct 2021 WITH strong subscriber growth in fixed broadband, fixed-line players are expected to fare better than mobile operators in 2021, according to equity analysts. UOB Kay Hian Research points out that third-quarter (Q3) fibre rollout had surpassed targets despite the lockdown, as the Jendela (National Digital Network) initiative delivered a third consecutive quarter of exceeded targets. The research unit notes that key highlights at end-September 2021 included net additions of 378,000 quarter-on-quarter fibre broadband passes to 6.4 million and average mobile broadband speed at 31.34Mbps while 4G coverage is now at 94.03%. “Encouragingly, the fibre broadband passes have reached 211.4% of Q3 2021 target of 179,013 net additions despite a tightened lockdown from June to August 2021. “The regulator (Malaysian Communications and Multimedia Commission or MCMC) is confident of achieving 7.5 million fibre broadband passes ahead of its end-2022 timeline,” says UOB Kay Hian Research. Also, the collaborative efforts among industry players in achieving higher household penetration continue to bode well for the fixed operators like Telekom Malaysia Bhd (TM) and TIME Dotcom Bhd. With a wider fibre footprint, these companies would benefit from higher subscriber growth as evidenced in the first half of 2021. UOB Kay Hian Research believes fixed broadband subscriber growth will continue to improve beyond the lockdown period. This is because Malaysia’s fixed broadband household penetration remains relatively low compared to regional peers, although it has improved commendably to 39% in Q1 of 2021 (Q4 2020: 37.2%; Q1 2020: 35%). Also, the research unit understands that the regulator remains focused on the fine balance between consumer affordability and investment returns for the telecommunication companies (telcos), and is satisfied with the price point of the current home broadband packages. By accounting for 1% of the monthly gross national income per capita, the entry-level broadband package of RM79 to RM99 per month appears reasonable as connectivity is gradually becoming everyone’s basic necessity. “The risk of heightened price competition could creep up with the new entrants in the home broadband space such as Astro Malaysia Holdings Bhd and Allo Technology Sdn Bhd. “However, we believe the incumbents would still have the upper hand, given their accelerated efforts to expand fibre footprint, invest in network quality and enhance product attractiveness (such as bundling) for customer stickiness,” it says. While the research unit expects 2021 sector earnings to grow 9% year-on-year to RM5.23bil, it also forecasts a seasonally weaker second half of the year. This is predicated on weak consumer and business sentiment – likely to improve only in Q4 2021, TM’s continued voluntary separation scheme provision in Q3 2021, and typically higher operating expenditure for Axiata Group Bhd and TM towards Q4 2021, which will see the tail-end of 3G accelerated depreciation for Celcom. UOB Kay Hian Research expects earnings growth for 2021 to be driven by a 9% year-on-year topline expansion from fixed-line players (including higher data centre revenue from Time) and 2% service revenue growth from the big three telcos. Growth will also be driven by stable earnings before interest, taxes, depreciation and amortisation margin (EBITDA) and increased enterprise solution orderbook, particularly for TM¸ which is likely to materialise in Q4 2021. The research unit maintains its “market weight” rating on the telecommunications sector and its top picks are TM for its good growth prospects and Axiata for its depressed valuation and it being a proxy for regional reopening plays.
RHB Research also maintains its “overweight” rating on the sector, with its preferred picks being TM, Axiata and OCK Group Bhd. “We continue to like fixed line and integrated players, given the stronger catalysts arising from the government’s connectivity agenda and the lower competitive risks versus mobile plays,” says the research unit. It notes that of the fibre additions in Q3 2021, TM surpassed its quarterly target by 287%, followed by Celcom Timur (180%) and Maxis Bhd (105%). Time’s rollout fell short at 44% on prohibitions enforced on site installations at multi-dwelling units during the movement control order (MCO 3.0). Meanwhile, 67 new 4G sites were added in Q3 2021, or 3% ahead of target, with Digi.com Bhd, Maxis and U Mobile Sdn Bhd attaining 100%, 106% and 108% of their initial targets, respectively. This brought year-to-date new site builds to 148. Celcom did not build any new 4G sites in Q3. RHB Research expects the gap to narrow with the population target of 96.9% set to be achieved by the second half of 2022. On 3G shutdown, the telcos are on track to migrate 77% of 3G subscribers (1.6 million) to 4G by the end of this year, with the remainder (2G fall-back) to be migrated in 2022. “In addition to the earlier fast-tracking of 5G rollout to end-December 2021, the provision of satellite connectivity in 839 areas – to improve mobile coverage in remote areas – has also been moved to phase one from phase two,” says the research unit. “We gather that 12 of 14 states are awaiting their respective gazettes into by-laws, which paves the way for communications services to be made a public utility. “The regulator also stated that the long-awaited Jendela phase one tender outcome, which involves the construction of 1,661 new 4G sites nationwide, is slated to be announced by month’s end,” adds RHB Research. Meanwhile, TA Securities Research views the investment case for the local telecommunications sector being reinforced by Malaysia’s imminent 5G rollout. TA Securities Research points out that while 5G rollout is still in its infancy, it has been brought to the forefront with increased digitalisation during the pandemic, underscoring the importance of fast, reliable and ubiquitous connectivity. “We view the major telcos including Maxis, Celcom, Digi, TM and Time as beneficiaries of accelerating digitalisation by small and medium enterprises, corporates and the public sector,” says the research unit. Beyond basic mobile and fixed connectivity solutions, those based on more advanced technologies like artificial intelligence (AI), cloud and Internet of things (IoT) are now more prevalent across their digital portfolios. And in solidifying their expertise, telcos have also forged partnerships with industry leaders. “For instance, Maxis is partnering Amazon Web Services to offer public cloud solutions and Cisco to offer managed Software-Defined Wide Area Network, Celcom is collaborating with Microsoft for Celcom Cloud Suite, its enterprise-class cloud service, which focuses on Infrastructure as a Service and Platform as a Service. “Meanwhile, Digi is providing cloud-based enterprise resource planning solution by Oracle NetSuite while TM’s collaboration with Huawei allows it to offer full cloud capabilities as a core offering,” notes TA Securities Research. The research unit is positive about the efforts and targets that Axiata, Maxis and Digi have in place to capture opportunities from enterprises amid the trend of accelerating digitalisation and the emerging disruptive technologies. For Axiata, it has targets for enterprise contributions to the group growing by three times from 7% in 2019 to 20% in 2024 via organic and inorganic means. Maxis, as part of its strategy to be Malaysia’s leading converged solutions provider which targets group service revenue at RM10bil by 2023, seeks to double down on the enterprise segment and is positioning itself as the preferred digitalisation partner for Malaysian businesses with SMEs in focus. Digi has near-term targets to grow its business-to-business (B2B) revenue by 33% from 2020 to 2023. TA Securities Research also likes TM for its role in Malaysia’s agenda to accelerate 5G rollout via its extensive nationwide fibre network of over 600,000km and its appointment as a cloud service provider to support the public sector’s cloud transformation plan as per MyDigital.
bukan Game....GUM...look at all Glove counters....all keno Gum......2021 ...50 hari akan habis....many fundmanagers will long holiday.......our market will like ....sleeping or mabuk style;any rebound is sell...let see....better sideway,save your money...
1.Insider collect higher price based on company announcement. 2.5G is big opportunity 3.Overall market sentiment drag today price from break 1.05.Once it break,next is technical uptrend
no rebound lah......REBOMB.....volume too thin how to rebound ?naik 0.01,0.02,0.05 or 0.10 cts....ini panggil rebound ? makan roti canai,teh all beng,half boil egg bolih lah !
Moved some cash to Enra bhd below 84sens....atleast growing a bit....Pensonic investment sleeping for more than a year...... Enra closed at 94 today....recently sold Enra kimia for 50million to Hextar/ Ekopintar....the extra ordinary gain of 20million will soon appear either in this coming qtr or the next....initially from the oil and gas sector...Enra now is diversifying into a new business....trying to get recurring annual income.... Enra also concluded the purchase of some assets..company is bringing in new shareholders issuing 27million Enra shares @ RM1...... From the Sale of Enra Kimia....10million is expected to be paid out to investors in the form of a special dividend..about 7sens....to be declared soon.... Enra recently had its EGM to approve the Enra kimia Sale.. Enra Bhd....formerly known as Preduren Bhd..was taken over by Dato Mazlin and Tan Sri @ RM1.60....at its peak it traded above RM3...Dato Mazkin is also big BOSS at Opcom Bhd......the Board of Directors ( very influential ).....former big bosses from big Oil and Property companies were pulled in to make Enra a STAR....once. But the OIL CRASH.......broke all that... Browse through Bursa Announcement.....and u will c....Chua Ming Huat....buying consistently.... Having said all ......Dont play contra...this counter has pulled back sharply several times.... All the Best..
satha 44..you right ! ...i visit google already.......yes Chua Ming Huat bought more Enra share at October..2021 ! i will wait Enra good price to buy Enra.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Loh Kok Wai W
3,588 posts
Posted by Loh Kok Wai W > 2021-11-05 15:29 | Report Abuse
in share market everything will done..........