Broadband in Malaysia has not been impressive for users. For many years, the data provider is dominated by one company and users have to endure slow speed and bad service. However, over the past few years, things have really improved.
With the sector more liberated, more service providers came into the market. Moreover, the incumbent itself managed to turn itself around and roll out very successfully its new high speed broadband service, Unifi. It seems that the broadband infrastructure in Malaysia is finally changing for the better. One company in particular that is doing a great job is Time dotcom Berhad.
Time dotcom positioned itself as more than just a competitor to Unifi. Rather, it focused mainly on enterprise customers, providing broadband with great stability and speeds up to 100Mbps. On top of that Time dotcom has invested in international submarine cable assets and now is building connectivity from Europe to Asia and Asia to the United States. According to the company, it aspired to become the preferred “carriers’ carrier” in the ASEAN region. Lastly, the company also has a successful data centre business with data centre located in both Malaysia and Singapore, and also partnership in Hong Kong, Thailand and Vietnam.
Time dotcom has almost doubled its revenue since FY2010 from RM321.1 million to RM596.3 million in FY2014. The company’s profit also closed to double to RM173.9 million over the same period. The company continues to invest heavily in infrastructure. Yet, it has a very strong balance sheet, at a net cash position with more than RM800 million worth of equity investment in Digi.com Berhad, one of the major telco in Malaysia.
Value in Action
Sadly, the company does not come cheap. After a long successful performance over the past five years, its share price is now trading at more than 19 times its price to earnings ratio and only offers a dividend yield of only 0.8%. With the increased competition in the Malaysia market and the slowdown in the country’s economy, some investors might argue that that is too steep a valuation to pay for the company.
Submit your email address for important market updates and FREE case studies!
Error: Contact form not found.
We will only provide you with information relevant to value investing. You can unsubscribe at any time. Your contact details will be safeguarded
The information provided is for general information purposes only and is not intended to be any investment or financial advice. All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and do not in any way represent those of his employer and other related entities. Stanley Lim does not own any companies mentioned.
There is no ads to display, Please add some