Strong Outlook For OCK Group With Recurring Income From Telco Sites

OCK Group Bhd (OCK) near term outlook remains upbeat, supported by the strong long-term recurring income from owning and managing over 5,300 telco sites across Vietnam, Myanmar, and Malaysia.

Meanwhile, the group is also beefing up the renewable energy segment through the participation of Net Energy Metering (NEM) programme.

“Recall that as of end-1QFY23, OCK owns and manages over 5,300 telco sites across Vietnam, Myanmar, and Malaysia. Moving forward, we believe OCK may register more than 6,000 telco sites by end-2023, driven by additions of new telco sites, particularly in Vietnam,” said Malacca Securities in the recent Stock Digest.

The move is in line with the group’s aspiration to be one of the leading telecommunication network services (TNS) providers in the ASEAN region. As at end-1Q23, OCK is equipped with an outstanding TNS orderbook of more than RM320.0m.

“While regional markets may see gradual expansion in the number of tower portfolio, we reckon that growth on the local front to emanate from the execution of projects under the JENDELA plan which is to boost digital connectivity,” said Malacca Securities.

Under the Phase 2 of JENDELA programme, OCK will be eyeing a slice of the government allocation of RM725.0m from Budget 2023 to provide internet coverage to over the remainder 3% of populated area and it aims to achieve 9.0m fibre premises passed by the end-2025.

Meanwhile, they believe OCK is also well positioned to leverage onto Malaysian government targets to expedite the 5G rollout to achieve 80.0% 5G population coverage by the end-2023. As at 31st July 2023, 5G coverage in populated areas stood at approximately 66.8%.

Elsewhere, OCK is committed to beef up the renewable energy segment with the construction of 3.2MW solar project that is slated for commercial operations by 4Q23. The group also will participate in renewable energy-related projects such as Corporate Green Power Program (CGPP) and is actively seeking to acquire additional solar sites.

“Still, we are ceasing coverage on OCK due to reallocation of internal resources. Our last recommendation on OCK was BUY with a fair value at RM0.48,” said Malacca Securities.

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