AnalysisBursa

8 things I learned from the 2020 Time dotCom AGM

Listed on Bursa Malaysia, TIME dotCom Berhad provides 100% fibre optic-based broadband services to retail customers in Malaysia. It also has stakes in several international subsea cable systems and is present in the data centre business across Malaysia, Singapore, Thailand, and Vietnam.

I attended the company’s recent annual meeting to learn more about this company. Here are eight things I learned from the 2020 Time dotCom AGM.

1. TIME’s revenue increased 13.3% year-on-year to RM1.1 billion in 2019 primarily due to growth in its wholesale and retail segments. Cloud service providers are TIME’s significant clients according to executive director Afzal Abdul Rahim. Questions about the revenue contribution from these clients were asked but not disclosed. He added that TIME will have to pay more income tax in the future as the company has slowly used up its tax relief over the years.

2. TIME aims to reach one million premises passed by 2020 for its retail segment. Although the number of premises passed grew 30% year-on-year in 2019, Afzal reckoned the company would most likely miss the target by 10% because of roll-out delays amid the movement control order in Malaysia. He admitted the company could have done better and was frank enough to share the likely outcome with shareholders.

Similarly, RM4.0 million was impaired on the investment in KIRZ. He apologised to shareholders as this investment did not pan out. Internet traffic volume surged during lockdowns across the countries where TIME is present, but this has not trickled down to more business for TIME so far.

3. TIME is bullish about its data centre business and sees increasing contribution from this segment going forward. The company is expanding its data centre business to cater to additional demand for data centres from over-the-top players or content providers. Some of its initiatives include:

  • Acquisition of Menara AIMS in Kuala Lumpur at RM95.8 million
  • Ongoing construction of another data centre in Cyberjaya, scheduled to be complete by 2020
  • Its recent foray into the data centre business in Thailand in 2019

4. Minority Shareholder Watch Group (MSWG) pointed out that other income dropped significantly from RM24.4 million in 2018 to RM0.5 million in 2019. This was mainly due to a net gain on foreign exchange and a write-back of an overprovision of expenses in 2018. On the other hand, other expenses jumped from RM1.0 million in 2018 to RM24.5 million in 2019 because of a net loss on foreign exchange, higher write-off of property, plant, and equipment as well as a provision for financial guarantee.

5. TIME made a provision for financial guarantee at RM16.1 million as it had to repay bank borrowings on behalf of its associate, KIRZ in Thailand. Full allowance for doubtful debts at RM6.5 million was also made as it was uncertain if the associate could pay back the advances given.

6. TIME CEO Afzal Rahim was sceptical about the hype surrounding 5G. He thinks ‘5G is a big conspiracy made up by the GSM Association’. He sees 5G as a chance for the company to support its clients by ‘fiberizing’ base stations and providing adequate capacity to people. TIME positions itself as a near-utility type of company but will most likely not venture into the mobile data segment.

7. TIME is the first broadband player in Malaysia to launch retail broadband service without any lock-in contracts. This package is particularly popular among consumers like students and young professionals who are not able to commit heavily up-front. Its fibre home broadband service is also one of the fastest and most competitively priced in Malaysia.

8. A shareholder highlighted that TIME does not provide broadband services to the vast majority of consumers who stay in landed properties. Rahim clarified that the company was not permitted by local authorities to do so. Amusingly, another shareholder commented that his connection using a TIME fibre home broadband during the AGM was unstable. Rahim suggested that the shareholder use an ethernet connection instead of Wi-Fi and subsequently contacted his team to help solve the issue.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

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Shak Chee Hoi

Chee Hoi is an investor and research analyst at The Fifth Person. He was previously involved in wildlife conservation work with a non-governmental organisation as well as sustainability consultancy work. He personally believes in impacting society and the environment for the greater good.

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