Neratel

(18-02-2014, 12:17 AM)Wildreamz Wrote:

(17-02-2014, 10:03 PM)GPD Wrote: Slow and steady although I think there is a premium in its price now. Since there are no confirmation of big contracts coming their way up till now, if they report a lower revenue/profit or a 2cts div (which to me is now below expectation) this Thursday, I suspect Mr. Market will reduce that "premium".

(vested..... at the wrong price!)

Neratel has a history of reporting their results strategically, release some news concurrently with average result to keep investors' expectation up.

I suppose that means no fireworks this quarter.

4 cts !!! HUAT La!!!!

It is encouraging to see that the "leasing revenue" is increasing.

(Vested)

I am pleasantly surprised by this 4cts. I thought they might cut it to 3cts for the final since they already paid out 2cts for the same FY. I guess one of the buddies here is right. The parent really milk this cash generating cow nicely.

COS decrease offset by increase operating cost. No major ups or down and no further news on Myranmar in the briefing.

(vested)

They generated EPS of 6.48c. And they issued 6c dividend this FY.

Payout ratio = 92.6% (Yield = 8.39% based on last traded price of $0.715)

Hope they can keep up with this, and maintain growth. Competition seems tough too.

On the bright side, Myanmar story is a bonus wild card.

(vested, but worried)

myanmar growth story may not add much to bottom line, after all myanmar is a small economy, compared with other "emerging markets."

I too feel Neratel may be fairly valued now. Cheers to those vested before, I was late to the party for this counter, now feel that no margin of safety and its also trading near high range...

(20-02-2014, 09:07 PM)Wildreamz Wrote: They generated EPS of 6.48c. And they issued 6c dividend this FY.

Payout ratio = 92.6% (Yield = 8.39% based on last traded price of $0.715)

Hope they can keep up with this, and maintain growth. Competition seems tough too.

On the bright side, Myanmar story is a bonus wild card.

(vested, but worried)

If the S$7 million negative goodwill is taken out, the EPS is around 4.8cts.
4cts per annum is a more sustainable dividend.

Stripping off that one-off $7mil gain, NeraTel is trading at 16x FY13 earning. Its highest PE by far. Based on its historical average of 11, its fair value is about 52cts. Before the Myranmar story, it is trading at 62cts. So is there a premium of 10cts for being a well-managed and rewarding shareholders company and another 12 cts over the possible Myranmar story?

(28-02-2014, 03:11 AM)GPD Wrote: Stripping off that one-off $7mil gain, NeraTel is trading at 16x FY13 earning. Its highest PE by far. Based on its historical average of 11, its fair value is about 52cts. Before the Myranmar story, it is trading at 62cts. So is there a premium of 10cts for being a well-managed and rewarding shareholders company and another 12 cts over the possible Myranmar story?

Growth in coming years can come from network infrastructure and payment solution segments going by the below statements made by management..

In FY 2013, the Group’s Network Infrastructure business area managed to secure approximately $84.4 million in order in-take, an increase of 28.1% compared to $65.9 million in 2012 due to higher order in- take from customers outside Singapore.

In FY2013 the Group’s Payment Solutions business area secured approximately $41.3 million in order in-take, an increase of 17.0% compared to $35.3 million in FY 2012 due to strong point-of-sale terminal orders from banks in Philippines and Thailand.

Capes is also significantly higher at 11.8m mainly due to purchase of POS terminal for leasing.

I will be silently hoping for 5c div this FY although at 16x earnings it does look fairly valued to me.

I left out the underperforming Telecom segment which was highlighted by OSK DMG in the below report

Middle East North Africa (MENA) telecom business the key disappointment.

Although management previously expected its Nera branded point-to-point radio products to excel in the MENA region, actual results proved a disappointment. Revenue for this segment declined by 63.7% y-o-y in 4Q13 and 10.3% y-o-y for the full-year. NeraTel said this was due to intensifying competition as well as the group’s selectiveness in undertaking projects.

Management provided the example of two projects valued at about SGD10m in aggregate that were not undertaken on their poor payment terms and weaker margins. On the other hand, new order wins for this segment also decreased 7.6% y-o-y to SGD67.6m.

Going forward, we expect the expiry of the Nera product distributorship agreement in January will boost the group’s competitiveness. NeraTel can not only retain the Nera brand, but is also able to distribute other companies’ products. It will even be able to redesign/reengineer the Nera products to achieve cost competitiveness. Hence, we expect growth for this segment to pick up again this year.

http://research.dmg.com.sg:9898/UploadPD...140224.pdf