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.
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