RHB Research has maintained its BUY call on OCK Group with a RM0.74 sum-of-the-parts target price, implying 76% upside and around 3% FY27 dividend yield, saying stronger earnings execution could emerge from its growing digital infrastructure tenderbook.
OCK’s fourth-quarter profit after tax and minority interest rose 72% quarter-on-quarter to RM19.4 million, helped by RM9.5 million in investment income from dividends generated by its Solarpack solar asset. The extension of tower asset useful lives from 25 to 35 years also supported full-year earnings.
Adjusted for the solar dividend, FY26 earnings were broadly within expectations at 96% of RHB Research’s forecast. The group also announced a second interim dividend-in-specie of three treasury shares for every 100 shares, equivalent to about 1 sen per share.
Quarterly revenue improved sequentially as higher billings from broadband projects and related AI contracts combined with stronger power solutions sales from EI Power. The latter benefited from an outstanding data centre orderbook exceeding RM200 million at the start of the quarter.
Looking ahead, the research house said OCK is moving away from legacy site contracting as growth levels off and expanding into broadband, connectivity and smart city projects. Its digital infrastructure tenderbook stands at around RM500 million, which could translate into new wins and lift margins and earnings over the medium term.
OCK’s towerco business contributes more than 70% of group EBITDA, with management also looking to expand its regional site portfolio through acquisitions ahead of a potential IPO.
RHB Research said the stock trades at around two standard deviations below its historical EV/EBITDA mean, with stronger earnings execution identified as a key catalyst. Forecasts and the target price remain unchanged pending the results briefing.
As of 2.38 pm, the stock price gained 2.38% to RM0.43.
