Buying OCK

OCK is a company principally involved in provision of telecommunication network services. It's clients include the likes of Maxis, Digi, U-Mobile, Huawei and Ericsson. 

The main attraction of this company is the communication tower business. As a holder of Network Facilities Provider (NFP), OCK is able to build and lease the base stations to telco operators and providers in return for recurring rental income. 6 of the 7 local telco network providers are OCK's client and business partners. I believe that sharing of sites or towers is the way to go in the future due to the potentially lower rental rates enjoyed by telco operators. This is a win-win situation for OCK and telco operators. 

Last year, OCK built and acquired 60 sites for transmission station. They managed to increase that to 150 sites this year with some juicy recurring earning to expect in the coming quarters. The 150 sites would potentially contribute RM8-9 million p.a. to their top line and RM2 million p.a. to bottom line. The target for 2014 is to have another 300 sites. In addition, they also secured jobs from Digi to upgrade 400 of their existing sites to LTE 4G. In the Budget 2014 there is also an allocation of RM1.5 billion to build 1000 towers in rural areas within the next 3 years. OCK should be able to secure a few of these towers.

Other than the tower busines, another potentially lucrative segment for OCK is the solar power segment. Solar business is very lucrative since one only needs to invest upfront and reap the returns for a long long time. OCK currently owns a 1MW solar farm in Kelantan with concession period of 21 years. This farm delivers lucrative recurring income of RM1.4 million p.a. to the top line. The break-even period is about 5-6 years. And OCK plans to own up to 30MW within the next 3 years.

Another positive development by OCK is the expansion into Myanmar and Cambodia. These two countries offer many new jobs due to the lack of infrastructure there. 

In August 2013, OCK placed out 10% of its stock to LTAT at 47 sen a piece, for a total of RM12.1mil to fulfill the bumiputra quota in preparation to list in the main board. Although LTAT has disposed some of it's holdings in the past few days, I reckon that is just a normal year end book balancing by the fund.  

One caution though, is that the promise to list in the main board by September- November has lapsed. Well, investing always have risks. So I am in and bought 5000 units @ RM0.78 of OCK. Ah Bu fund looks like this now:

Financial assets at 27.12.2013
	Name	Purchase Date	Purchase Price	Current Price	Unit	Current Value	P/L ex Dividend	Dividend	P/L inc Dividend
Cash	Hle-Broking			20098,03
Stocks	OCK	27.12.13	0,78	0,77	5000	3850	-1,8%		-1,8%
	Sunreit	04.10.13	1,40	1,23	5000	6150	-12,0%	89,25	-10,7%
	Cypark	22.10.13	2,17	2,52	3000	7560	16,1%		16,1%
	Datasonic	19.11.13	1,70	2,13	7500	15975	25,5%		25,5%
Total Stock				33535,00	62,5	%
Total cash				20098,03	37,5	%
Total				53633,03
Current profit				3633,03	7,3	%
Total dividend				242

ps: Datasonic underwent a 1-to-5 share split on 23.12.2013. Thus the number of units are now 1500*5=7500.