Neratel

[KopiKat]

So, most likely, if the part in red is not activated, then,

1. Replace Eltek Directors with their own people
2. Replace 'unfriendly' IDs eg. those who recommended 'REJECT OFFER'
3. Replace CEO (if not co-operative)

Above is extracted from Post #173 of this thread. Part 1 already done some time back. Today, Part 2, they resigned.... Extracts,


RESIGNATION OF INDEPENDENT DIRECTORS / CHANGES IN THE COMPOSITIONS OF BOARD AND BOARD COMMITTEES

The Board of Directors of Nera Telecommunications Ltd (the “Company”) wishes to announce that Mr S Chandra Das, Mr Lau Ping Sum and Mr Sitoh Yih Pin have resigned as Directors of the Company with effect from 8 February 2013.

[hongonn]

Above is extracted from Post #173 of this thread. Part 1 already done some time back. Today, Part 2, they resigned.... Extracts,


RESIGNATION OF INDEPENDENT DIRECTORS / CHANGES IN THE COMPOSITIONS OF BOARD AND BOARD COMMITTEES

The Board of Directors of Nera Telecommunications Ltd (the “Company”) wishes to announce that Mr S Chandra Das, Mr Lau Ping Sum and Mr Sitoh Yih Pin have resigned as Directors of the Company with effect from 8 February 2013.

I am fine with the latest result but this news is really annoying. Now they have forced out all the directors on board except the CEO. Probably some internal conflict going on.

Does it form any serious red flag? Or it is norm for new investor to rid of the directors? All 3 resigned are independent non executive directors, will this seriously shake the business?

[felixleong]

doesn't look good with such internal conflict

[CityFarmer]

Neratel is in my watch list.

After changes of major shareholder and management team, couple with various signs observed, the corporate strategy may go different route. Pending for more clarity, better remain in watch list and continue watching...

[orang]

What is your expectation? 4 cts div is very good already..

---

4Q EPS = 1.07 cts vs 1.67 cts LY
FY12 EPS = 5.36 cts vs 3.73 cts LY

Overall, looks like company performance is good. Right?

Sorry.. I love to worry.. for my stocks..

For me, Q4 EPS was a disappointment. If you look at the past couple of years, Q4 EPS was the strongest in terms of Revenue and Profit. But, yes, if we look further back, it wasn't true for FY08 and FY09. I was wrong to have assumed that FY10 and FY11 would give an indication of a new seasonal trend in EPS... Back to the drawing board... Need to re-polish my crystal ball for the new year...

I was also expecting a bigger Div, as for the past few years, they'd paid DPS > EPS (supported by Cash Flow). With the 9M EPS = 4.29ct, the probability of paying more than 4ct was high, in my expectations. So, with EPS = 5.36ct, no bigger dividend declared... ya, a bit of a disappointment. I looked at Cash Flow, no reason for not paying a higher Div, even though it was much lower compared to FY11. Perhaps new controlling shareholder has growth plans?? Especially for Indonesia market where they're based?? I sure hope so...

But, no complaints about the 4ct Div... At least, my worst fears of a potential cut in payout, to retain cash for other purposes, didn't happen... Phew! Can sleep better now, for the time being.. till I decide which stock I should worry about next...

---

I think the expanded MENA markets that came along with the purchase of NERA trademark makes it a different ball game in that it has the effect of just raising the earnings to a higher level.

The higher earnings about $14m in 2011 and about $19m in 2012 just reflect the inclusion of the MENA markets. Prior to that earnings were languishing around the $11m level.

[KopiKat]

Above is extracted from Post #173 of this thread. Part 1 already done some time back. Today, Part 2, they resigned.... Extracts,


RESIGNATION OF INDEPENDENT DIRECTORS / CHANGES IN THE COMPOSITIONS OF BOARD AND BOARD COMMITTEES

The Board of Directors of Nera Telecommunications Ltd (the “Company”) wishes to announce that Mr S Chandra Das, Mr Lau Ping Sum and Mr Sitoh Yih Pin have resigned as Directors of the Company with effect from 8 February 2013.

I am fine with the latest result but this news is really annoying. Now they have forced out all the directors on board except the CEO. Probably some internal conflict going on.

Does it form any serious red flag? Or it is norm for new investor to rid of the directors? All 3 resigned are independent non executive directors, will this seriously shake the business?

For me, it was a high probability outcome and I don't see it as a sign of serious internal conflicts. My bigger worry was that they may cut dividend payout...

My current thoughts are the IDs (btw, all are PAP-linked) were possibly useful when Neratel was controlled by Eltek. Perhaps their network from their political affiliation would have been useful enough to provide some initial advantages, especially for Singapore based projects. As Neratel was almost like a subsidiary, there're likely to be many constraints in biz territory and product line-ups. What they can do and cannot do was very likely dictated by Eltek, who'll likely have their own priorities and own interests first. So, ya, I think the IDs' jobs must have almost been a no-brainer kind...

Now, with the change in majority shareholder, we have in effect a Neratel who's cut off from their roots.... They got new territory rights to MENA (which is a plus) and they now get their Nera products direct from the factories (which has a new owner, Ceragon, who's also a competitor). There's also a non-competition clause for the next couple of years, IIRC.

IMO, the Neratel of today is going to be very different from that of 1-2 years back. Being cut off from Eltek, there're going to be a lot of new challenges and uncertainties to handle. Where we were previously looking at a Neratel that seems to have plateaued and stuck at a steady and rather stable level of Revenue & Earnings + Dividends, what's going to happen next will largely depend on how versatile the management is. Of course it'll not be immediate, perhaps when the non-competitive clauses expires...this year(?) or next (?).

Looking at the background of the recently resigned 3 IDs, I have doubts that they'll be as effective in the 'new' Neratel. I do not have the confidence they can rise to the new challenges ahead anyway. So, ya, good to get them replaced...

Since they didn't cut my 4cts dividend, I'm now more hopeful that the new controlling shareholder and my expectations may be more aligned... Perhaps some growth in Indonesia through their network?? An increased scope of biz beyond Telecom and Infocomm?? Let's see what'll happen... Got to stay nimble tho', in case I'm wrong in my assessment...

Note : I'm quite heavily vested, so my views are definitely tainted...I may also suddenly let go of my stake (if I find something better) and not post here... So, make your own decisions..

[georgelee]

is neratel gov funded?

[hongonn]

Interestingly i read about merger and acquisition over the holiday and it mentions acquirer that used cash as part of hostile takeover outpaced those who use cash in friendly merger in stock price performance, by big percentage.

Reason being the acquirer believe they can improve te target firm result thus willing to use cash to make deal happen. Normally they will change the company top management and followed by improvement in operation.

How true is that i am not sure. Probably i will just wait and see. For better or worse, i still learn a lesson how to handle situation like this

[KopiKat]

Hey! Just what I was hoping (in blue) for (but still prelim stage)....

Extracts from Lim & Tan report dated 13-Feb-13,


After the results briefing last Friday, we are confident that Nera can deliver another 15% earnings growth this year to $22mln underpinned by

(a) management’s target to grow their installed base of point of sales terminals in Southeast Asia to more than 300,000 from 200,000 last year which is expected to increase their recurrent base of revenue stream;

(b) the telecom division which had garnered 18.3% more orders last year to $73mln is expected to continue seeing robust orders as under-developed countries in the Middle East and Southeast Asia continue to invest in wireless telecom infrastructure in replacement of fixed line infrastructure as well as demand for faster internet speed as 3G/4G gains momentum;

( c) Nera’s ability to offer the best breed of tech offerings such as Juniper Networks for routing, Palo Alto for firewall, Extreme Network for switching and Verifone for wireless connection puts them one step ahead of competitors;

(d) the company’s new owners Northstar who owns 53.38% of the company have started to introduce new business opportunities to Nera by linking them up to one of their private telecom tower company in Southeast Asia, although negotiations are still at the preliminary stage.

Valuations and Recommendations

At 9.5x PE, 15% growth, 6.9% dividend yield, 33% ROE and $44mln net cash, valuations continue to be attractive and we maintain BUY.

[BlueKelah]

AS ORDINARY BUSINESS
1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December
2012 together with the Auditors’ Report thereon. (Resolution 1)
2. To declare a final one-tier tax exempt dividend of 4 cents per share for the year ended 31 December 2012. (Resolution 2)

Does this mean they are going to announce another 4 cents on top of the 4 cents already announced?