OCK Group Bhd's financial performance for the first half of 2024 fell short of expectations, driven by lower revenue in its Telco Network Services (TNS) segment. The company reported a 2Q24 core profit after tax and minority interests (PATAMI) of RM7.6 million, marking a decrease of 26% year-on-year and 25.5% quarter-on-quarter. This brought the 1H24 core PATAMI to RM17.8 million, representing only 31% and 33% of the full-year forecasts by analysts at RHB and market consensus, respectively.
In response to these results, RHB Stock Broking House maintained a BUY recommendation with a target price of RM0.82, indicating a potential 44% upside, while Kenanga Stock Broking House downgraded its recommendation from OUTPERFORM to MARKET PERFORM, lowering its target price by 30% to RM0.60. The downgrade reflects concerns about weaker revenue visibility and potential delays in the rollout of Malaysia's second 5G network and the JENDELA Phase 2 project.
The weak performance in the TNS segment, attributed to the slow progress in 5G network rollout in Malaysia, has significantly impacted OCK's financials. The company recognised an impairment loss of RM7.6 million on trade receivables in 2Q24, an unusual move given its history of stable, recurring payments from major telco tenants. Despite the challenges, OCK's site leasing revenues remained stable, contributing 31% of total revenue, while the power solutions segment saw significant growth, with revenue more than doubling quarter-on-quarter.
OCK's outstanding order book stands at approximately RM270 million, with around RM105 million attributed to TNS projects and the remainder to non-TNS initiatives, including recent data centre (DC) power supply contracts worth RM32.5 million. The company's established track record in public sector infrastructure projects, such as JENDELA and Universal Service Provision (USP) clawback projects, positions it well for securing future digital projects from the government.
Looking ahead, OCK is actively tendering for more DC-related jobs, with DC revenues contributing about 6% of group revenue year-to-date. The company also disclosed its Scope 1 and 2 emissions for the first time in 2023, as part of its environmental, social, and governance (ESG) initiatives. OCK currently operates 29 solar farms across Malaysia, with a combined capacity of 14MW, and is seeking additional solar projects.
Source: RHB, Kenanga
Title: A Light Quarter; Keep BUY, Lower Revenue Visibility
受电信网络服务(TNS)部门收入减少的影响,OCK Group Bhd2024年上半年的财务业绩低于预期。该公司报告称,24年第二季度税后核心利润和少数股权(PATAMI)为760万令吉,同比下降26%,同比下降25.5%。这使24年上半年的核心PATAMI达到1780万令吉,分别仅占卢比和市场共识的分析师全年预测的31%和33%。
针对这些业绩,RhB Stock Broking House维持买入建议,目标价为0.82令吉,这表明可能有44%的上涨空间,而肯南加股票经纪公司将其建议评级从跑赢大盘下调至Market PerFormy,将其目标价下调30%至0.60令吉。降级反映了人们对收入可见度下降以及马来西亚第二个5G网络和JENDELA第二阶段项目的推出可能延迟的担忧。
由于马来西亚推出5G网络进展缓慢,TNS细分市场的表现疲软,严重影响了OCK的财务状况。该公司在24年第二季度确认了76万令吉的贸易应收账款减值亏损,鉴于其主要电信租户一直稳定地定期付款,这是一个不寻常的举动。尽管面临挑战,但OCK的场地租赁收入保持稳定,占总收入的31%,而电力解决方案板块实现了显著增长,收入同比增长了一倍以上。
OCK的未清订单约为27000万令吉,其中约10500万令吉归因于TNS项目,其余部分归因于非TNS的计划,包括最近价值3250万令吉的数据中心(DC)电力供应合同。该公司在公共部门基础设施项目(例如JENDELA和通用服务提供(USP)回扣项目)方面的良好记录,为确保未来的数字项目免受政府侵害奠定了良好的基础。
展望未来,OCK正在积极招标更多与华盛顿特区相关的工作岗位,今年迄今为止,华盛顿特区的收入约占集团收入的6%。作为其环境、社会和治理 (ESG) 计划的一部分,该公司还在 2023 年首次披露了其范围 1 和 2 的排放量。OCK目前在马来西亚经营29个太阳能发电厂,总容量为14兆瓦,并且正在寻求更多的太阳能项目。
资料来源:RhB,Kenanga
标题:淡季度;保持买入,降低收入可见度