KUALA LUMPUR: OCK Group Bhd is well-positioned to benefit strongly from 5G deployment in Malaysia, thanks to its solid execution track record in rolling out 3G/4G sites under projects initiated by the Malaysian Communications and Multimedia Commission (MCMC) and Jendela.
With over 5,500 towers spanning Malaysia, Vietnam, and Myanmar, OCK generates steady and long term recurring revenue, accounting for 60 per cent of its total group revenue.
The company is also focusing on green and digital expansion, including renewable energy (RE), data centers, and artificial intelligence (AI).
"OCK is well-positioned to capitalise on the growing data centre opportunities, having secured a RM25 million orderbook and robust RM50 million tender pipeline," said Philip Capital in a note today.
According to the research house, the green energy and power solution business is set to gain stronger traction, driven by strategic initiatives under the National Energy Transition Roadmap (NETR), including the expansion of more solar farms.
It said OCK's new digital business prospects are bolstered by its recent collaboration with SenseTime, a leading artificial AI software company, aimed at innovating AI-driven solutions for its customers.
"Quality long-term recurring income generator. We maintained a buy call with a target price of 85 sen.
"We see OCK as a prime beneficiary of 5G deployment both domestically and regionally, as well as the expansion of RE capacity under the NETR," said Philip Capital.
Philip Capital said OCK is trading at an attractive valuation of 11 times its estimated 2025 earnings per share, given its projected 20 per cent average annual profit growth from 2023 to 2026.
"This growth is driven by its strong and consistent regional site-leasing and maintenance business.
"Key risks include potential delays in project deployment and execution, as well as weaker-than-expected financial results and profit margins," it added.
Beneficiary of 5G deployment, OCK is a leading provider of comprehensive end-to-end telco network services in Malaysia, specialising in the ownership and leasing of towers to telco operators.
Regionally, OCK is Indonesia's largest tower-managed service provider and the leading independent tower company in Vietnam.