Captii Limited (formerly: Unified Communications Holdings)

[CityFarmer]

This stock came to my attention recently

Unified Communications Holdings Limited is a Singapore-based investment holding company engaged in providing mainly telecommunication management services.

Its customers base includes 30 mobile network operators and integrated telecom service providers in 17 countries around the world. These customers had amassed a combined base of some 659 million subscribers. The customers includes DiGi, Maxis, Singtel, Starhub, China Hong Kong, 3/Hutchison etc.

The company is in trouble previously and put into SGX watch-list. In 2011, it had been removed from the watch-list.

Any view from buddies here?

[CityFarmer]

Unified Communication Holding release their 1H FY2012 yesterday

http://info.sgx.com/webcorannc.nsf/Annou...endocument

The Group achieved consolidated revenue of S$5.0 million for the quarter ended 30 June 2012, an increase of 26% against revenue recorded in the corresponding quarter ended 30 June 2011. The increase in revenue for Q2 2012 is mainly contributed by the consolidation of revenues of Ahead Mobile Sdn Bhd (“AMSB”) which became a wholly owned subsidiary under VAS BU following the Group's acquisition of the remaining 60% equity interest in AMSB (“Acquisition of AMSB”) on 16 January 2012.

The Group achieved gross profit of S$2.4 million and a gross profit margin of 49% in Q2 2012, as compared to the S$1.7 million and 44% realised in Q2 2011 respectively.

The Group achieved net profit of S$0.4 million in Q2 2012. These results are higher compared to the net profit recorded in Q2 2011 of S$0.3 million.

Interim dividend of 1.5 cts declared, which is 4.6% as market price of 3.3 cts today

any comment?

(not vested)

[dzwm87]

I had looked through it briefly.

Unified Comms (UC) is a telco solution provider. Those sms-es which you received for spam are one of its many solutions services for telcos. Interestingly, it went through 4 years of losses after it was listed, been through the Watchlist and had successfully remove itself after another 4 consecutive years of profit-making.

1H FY12 results had been distorted by a fair value gain in its associate. This one-off benefit of S$5.3m inflated UC's P&L performance. Adjusting it away, their performance had declined. YoY for 1H FY12 - PATMI margin had fell from 10% to 8% though GPM had improved from 50% to 56%.

Plus points:
1. I like how they are generating good net op CF yield on their PAT. They are largely above 100% for its profitable years except for FY11.
2. This company is also trading below net cash/share! Net cash/share amounts to 4.7cents while UC is last closed at 3.3cents. UC had lately utilized approx. S$3m to purchase an investment property in KL. This shows that mgmt does recognize the huge cash which UC is hoarding. I don't like how they had allocate the capital into rental property - would have preferred them to distribute back in dividends. Nonetheless, the question is how much of such cash is free & idle (rather than WC needs)

Minus points:
1. Business nature seem to be non-attractive + competitive. How much value add can their solutions services really provide to telco? Moving forward, are they able to diversify into mobile app areas?
2. Poor returns performance; no doubt the net cash/share is tempting but the business itself isn't that fantastic either. Annualized ROE for FY12 had fell from FY11's 6.5% to 3.9%. ROA is also miserable at 3.2% (FY12 forward). NPM had also taken a bad hit if we exclude the one-off gain.

Valuation:
UC is currently trading at 7.7x forward FY12 & 6.4x TTM P/E.. 0.3x P/B

[dzwm87]

Adding on to my findings last night:

1. Some weak moat in UC's business:
They provide services such as voice revenue optimization. This means they provide missed call services in hoping that users will call back and hence book the lost voice revenue for telcos. Sounds like a decent value add for telcos but indeed how much additional revenue can they help to generate that will result in the different telcos becoming desperate for them? With intensifying competitions & saturated market, they have low bargaining power for their services.

2. Net cash hoard not exactly idle:
A S&P research report (found on their website) indicated that mgmt wish to use the cash to acquire companies in a hope to remain competitive. As mentioned above, they had used some S$3m to acquire a rental property in KL in order to boost their recurring income and reduce dependency in lumpy earnings. Thus, net cash isn't really idle and free for distribution. There is also no track record of mgmt's past acquisitions. We are unsure if they truly have an eye for bargain and lucrative acquisition. With competition adding pressure to their revenue & profit growth, this can create pressure for them to execute early acquisition that might fail.

3. Probably expecting net operating CF to fall wrt. PAT:
UC mgmt had indicated that they might shifting to leasing out their equipment and having a service maintenance contract to boost recurring income. With that, this means UC has added risks in holding their equipment. This risk heightens given the fact that they have no bargaining power in their products. Though receiving leases may provide stability in revenue, CF will lag. Adopting the lease model means UC have to hold more cash to invest in new equipment, as compared to the past where they are paid larger cash amt from the sale of their equipment.

In conclusion, all these mean that UC's cash holding may not be idle. There is also a risk the cash may be depleted with no earnings boost. The main investment attraction (trading below net cash) is thus being discounted. However, a below-average business can still be attractive if it is priced at a below-fair-value price. Yet, at 7x TTM P/E, it seems to be the contrary.

[cyclone]

Captii Limited formerly known as Unified Communications Holdings Limited.

[cyclone]

Too 'chim' for me. Don't know what it means. It sounds not good ?
http://infopub.sgx.com/Apps?A=COW_CorpAn...uddies.com

Update on the Petition Filed for Interim Relief

Reference is made to the announcements of 20 November 2013, 4 December 2013, 25 April 2014, 26 May 2014, 31 July 2014 and 22 September 2014 with regards to the Petition filed by the Company’s joint venture entity in India, Unified Telecom Private Limited (“UTPL”), to the High Court of Delhi in India to obtain interim relief on the protection of assets currently under the custody of a mobile telecoms network operator and service provider in India (“the Telco”) and to deny the penalty claims by the Telco against UTPL.

The Board of Directors wishes to update that, the High Court of Delhi has dismissed UTPL’s Petition as the Telco has initiated the arbitration proceeding before the tribunal. The High Court was of the view that the matter be resolved through arbitration proceedings since the tribunal was constituted. Management is seeking legal advice on the best course of action to be taken.

The Company will provide Shareholders with further updates as and when there are material developments on this matter.

[CityFarmer]

It shouldn't sound good, IMO.

You applies for a relief of an asset, hold under custody by your rival, but rejected. At the same time, the proceeding changes to arbitration. The legal fee should be lower, but what is your negotiation power when your asset are held under custody...

(not vested. Once the company is under watch list, but was removed)

Too 'chim' for me. Don't know what it means. It sounds not good ?
http://infopub.sgx.com/Apps?A=COW_CorpAn...uddies.com

Update on the Petition Filed for Interim Relief

Reference is made to the announcements of 20 November 2013, 4 December 2013, 25 April 2014, 26 May 2014, 31 July 2014 and 22 September 2014 with regards to the Petition filed by the Company’s joint venture entity in India, Unified Telecom Private Limited (“UTPL”), to the High Court of Delhi in India to obtain interim relief on the protection of assets currently under the custody of a mobile telecoms network operator and service provider in India (“the Telco”) and to deny the penalty claims by the Telco against UTPL.

The Board of Directors wishes to update that, the High Court of Delhi has dismissed UTPL’s Petition as the Telco has initiated the arbitration proceeding before the tribunal. The High Court was of the view that the matter be resolved through arbitration proceedings since the tribunal was constituted. Management is seeking legal advice on the best course of action to be taken.

The Company will provide Shareholders with further updates as and when there are material developments on this matter.

[CigarButts]

Got this investing idea from blue kelahs blog.

Investment prop : 2940
Cash : 13450
Total assets : 38203

Total liabilities : 4562
Non controlling interest : 1368

Number of shares : 31957
I value this with a conservative price of around 0.53 after putting a 50% discount on all non property and Non cash assets.

With a pe ratio of 7.11 and 2 years of positive cash flow. What more it has a 5% plus dividends yield. Value buy or value trap? Any history which I have missed out?

[zz...]

Got this investing idea from blue kelahs blog.

Investment prop : 2940
Cash : 13450
Total assets : 38203

Total liabilities : 4562
Non controlling interest : 1368

Number of shares : 31957
I value this with a conservative price of around 0.53 after putting a 50% discount on all non property and Non cash assets.

With a pe ratio of 7.11 and 2 years of positive cash flow. What more it has a 5% plus dividends yield. Value buy or value trap? Any history which I have missed out?

Not easy to accumulate enough shares

[BlueKelah]

Easy to accumulate if u buy from sell queue and push up the price. If u just wanna queue and wait no one gonna sell u lah lol. Just give ur broker a call or use the market depth to see the sell queue. There is usually couple hundred lots a few bids up.

If u get 100 lots can also become Top 20 shareholder. [emoji2]
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