January 24, 2011

TIMECOM - Time dotCom shares slip

Stock Name: TIMECOM
Company Name: TIME DOTCOM BHD
Research House: HLG

KUALA LUMPUR: Shares of Time dotCom slipped in early trade on Monday, Jan 24, as investors were concerned about the latest corporate development in the company following TIME ENGINEERING BHD []'s (TEB) proposed sale of its stake to its own shareholders.

At 9.09am, TdC was down four sen to 73 sen with 3.24 million shares done.

The FBM KLCI was up 2.63 points to 1,550.06. Turnover was 94.68 million shares valued at RM58 million. There were 179 gainers, 56 losers and 114 stocks unchanged.

Last Friday, Jan 21 TEB proposed to undertake a renounceable offer for sale its 626.18 million shares in TdC to TEB shareholders on the basis of eight offer shares for every 10 shares held in TEB.

The offer price would be not''less than 20% to the five-day volume weighted average market price up to the day prior to the price-fixing date. However, it shall not be less than 48 sen per offer share.

Meanwhile, Hong Leong Investment Bank Research (HLIB) is maintaining a Buy on Time dotCom (TdC) with a target price of 95 sen based on sum-of-parts.

It said on Monday, Jan 24 TdC is entering into a multi-year growth cycle with a high degree of operating leverage.

HLIB said TdC, by tapping into new growth areas such as global bandwidth and node fiberisation as well as proposing a series of synergistic acquisitions, the company is poised to become a regional growth telco.

'At the current price, TdC is trading at an estimated P/E of 26.5x and 20.4x for FY11 and FY12 respectively. We maintain our target price of RM0.95 based on SOP, pending the outcome of the recent proposed acquisitions and pending details on the collaboration with Astro.

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