KUCHING: It is ‘neutral’ for the telco sector and analysts reiterate our emphasis on fixed over mobile as they are the prime beneficiaries in broadband/5G infrastructure deployment.
According to the the research arm of Hong Leong Investment Bank Bhd (HLIB Research), with so many advantages over on-premise infrastructure, cloud adoption is rapidly rising and expected to the norm going forward.
“For exposure, both Telekom Malaysia Bhd (TM) and TIME dotCom Bhd (Time dotCom) are leading data centre and cloud service providers in Malaysia,” HLIB Research said.
“For telco sector, we maintain ‘neutral’ and reiterate our emphasis on fixed over mobile as they are the prime beneficiaries in broadband/5G infrastructure deployment.”
HLIB Research was particularly positive on TM’s cost optimisation measures which is now yielding an impactful outcome.
“Leveraging on its extensive fibre reach, TM is perceived to be the critical fundamental building block of government’s 5G rollout under MyDigital initiative.
“Furthermore, TM is well positioned as the sole Malaysian Cloud Service Provider when sovereignty is the utmost important in dealing with government’s data.”
In addition, the research arm liked Time dotCom as its retail is gaining momentum on the back of reach expansion and undisputable high value products.
“Also, data centre is expanding resiliently as IT outsourcing, cloud computing and virtualisation are widely adopted.
“Global bandwidth sale (GBS) is no longer a drag and expected to perform better as demand recovers.”
For the media sector, HLIB Research maintained ‘neutral’ (with a positive bias).
The research arm anticipated a recovery in advertising expenditure (adex) as business activities pick up.
“Other segments such as newsprint, radio, events and out-of-home advertising will also recover following the easing of movement restrictions.
“We like Media Prima Bhd as we believe the future growth of the company is multi-pronged underpinned by the improved performance from its advertising revenue, the positive contribution from its home shopping segment and the growth in content sales and distribution.
“Its diverse revenue base allows the company to weather through business cycles that affect any particular segment.”