11 Safar 1433
KUALA LUMPUR, Jan 5 , 2012- OSK Research has revised downwards Time dotCom Bhd to "neutral" from "buy" based on an unchanged sum-of-parts fair value of 70 sen.
In a research note Thursday, it said the recommendation did not factor in the contribution from the recently acquired Global Transit Communications Sdn Bhd, Global Transit Ltd and Applied Information Management Services Sdn Bhd pending further guidance from the management.
"We expect limited price upside, even after including the implied valuations of the three companies," it said, adding that Time dotCom also proposed to acquire Global Transit Singapore and Global Transit Hong Kong.
It said the acquisitions were made to enter the international submarine cable business, tap into the regional wholesale customer base, strengthen the global bandwidth business and diversify into the high growth data centre and managed services business.
"Management reckons that earnings should grow at the mid-teens level, fuelled by the wholesale data segment.
"It (Time dotCom) believes the business will outpace the annual bandwidth price erosion of 15-20 per cent and mitigate the cannibalisation of voice revenue," OSK Research said.
Source- BERNAMA
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