$OCK / 0172 (OCK GROUP BERHAD) -2Q24

Impairment Loss in Myanmar:

OCK faced a one-off RM7.6m impairment loss in 2QFY24 due to service level agreement (SLA) issues in Myanmar. Curfews and military checkpoints hindered access to tower sites, impacting revenues. Despite this, OCK's Myanmar operations remain stable with strong cash flows from lease payments.
RHB echoes this, noting the impairment resulted from diesel supply issues, though Myanmar remains a significant contributor to site leasing revenue (41%).

Focus on 5G Rollout and JENDELA:

OCK is completing its existing 5G rollout contracts in Malaysia, awaiting further opportunities from Malaysia’s second 5G network. JENDELA Phase 2 tenders are also anticipated after delays in Phase 1.
RHB highlights that 5G policy uncertainty will clear up by 4Q24, potentially boosting network spending in the second half of 2024. Digital contracts and data center (DC) projects are also set to drive future earnings.

Order Book and Future Contracts:

OCK's current order book stands at RM440m, with RM920m in tenders focused on digital solutions, particularly DC connectivity and backup power.
RHB reports a similar tender book value, with expectations for digital project momentum to pick up in FY25.