Time dotCom (BUY)
Strategically Positioned for Profit Maximization
- We left TdC’s 4Q11 results analyst briefing feeling positive especially with its impressive transformation strategy for data products, shifting focus more towards leasing business model rather than global bandwidth sales or IRU.
- TdC acknowledged that collaboration project with Astro is about 20%-25% behind schedule mainly due to delayed civil and mechanical engineering approvals from regulatory bodies. More effort is committed to complete coverage expansion and expect meaningful contributions only from 2H12 onwards.
- As for the acquisition proposal, TdC does not expect any hiccups while awaiting High Court approval.
- Comments: We opine that TdC share price is currently undervalued. Based on our estimation, TdC’s cash and DiGi holdings would already account for RM0.52 per share (based on DiGi’s closing price of RM3.99 on 24 Feb 2012), leaving RM0.16 per share for the remaining assets with a RM0.26 book value.
- Maintain our BUY call with unchanged SOP target price of RM0.85. If DiGi current share price is considered rather than our TP, SOP would be enhanced by 9 sen.
Source: HLIB Research 27 Feb 2012
No comments:
Post a Comment