PETALING JAYA: OCK Group Bhd is viewed as a key contender for telecommunications site leasing and new fifth-generation (5G) site deployments under the phased 5G rollout that is being undertaken by Digital Nasional Bhd (DNB).

       The group is currently conducting site survey works for DNB under phase one of the rollout in the Klang Valley and Putrajaya involving 500 sites, which are set to go live by year-end.

       RHB Research expects stronger earnings momentum for the group in the financial year 2022 (FY22) on the back of new 4G contracts and 5G rollout.

       Kenanga Research concurs, saying: “OCK is also poised to benefit from DNB’s assignment of Ericsson to roll out Malaysia’s 5G network.

       OCK

       “Having worked with Ericsson in Malaysia for over 15 years and being a familiar business partner, OCK should be able to win jobs from Ericsson to help build the 5G infrastructure.’’

       Apart from that, the site leasing business will continue to exhibit steady growth from new-builds in Myanmar and brownfield acquisitions in Vietnam, RHB said.

       Kenanga said OCK would continue to see growth in its telecom network services (TNS) and renewable energy (RE) segments.

       It said the growth in TNS would likely be driven by the rolling out and maintenance of more infrastructure to achieve Jendela’s aspiration of nationwide Internet coverage.

       As for RE, it said growth would likely be driven by the number of solar farms it owns and operates, both organically and inorganically.

       Kenanga has maintained its FY21 and FY22 earnings forecasts for OCK.

       RHB maintains its “buy’’ call on the stock with a target price of 59 sen a share. Kenanga has an “outperform’’ call with the same target price.

       “The stock trades at a compelling below five times FY22 enterprise value/earnings before interest tax depreciation and amortisation, which is not reflective of the prospects of its towerco business and improving domestic contracting works,’’ RHB said.

       RHB said key risks are weaker-than-expected earnings/margin and execution. Upside risks are positive earnings surprises and towerco value unlocking.