Highlights

THE INVESTMENT APPROACH OF CALVIN TAN

Author: calvintaneng   |   Latest post: Wed, 22 Jan 2020, 8:15 AM

 

REDTONE AGM HIGHLIGHT Author: firerain (Reposting & comment by Calvin Tan Research

Author:   |    Publish date:


I've attended Redtone's AGM yesterday morning and felt happy with all the informations provided by Group CEO Mr.Lau Bik Soon.

Mr.Lau is a nice guy,he spend about 30 minutes during AGM to explain and share outlook of all the three businesses,included

1) telecommunication business(TS),

2) manage telco network services(MTNS)

3( and industry digital services(IDS).

Even after AGM,He also willing to spend another 45 minute to patiently answer additional questions raise by a group of young shareholders.

The information share by Mr.Lau was summarized as below:

 

1.)MTNS business prospect is exciting due to RM21.6billion NFCP plan

 

NFCP involved huge investment from Telco and MCMC to build more infrastructure,outlook for MTNS is very exciting as the business segment servicing both telco and government.

 

TIME 3 project,which is funded by universal service provision(USP) fund managed by MCMC,had continue to extent but changed name to NFCP2.The NFCP2 already in tender now and the result should be announce sometime next year.

 

latest NFCP2

tender will involved 500 new telco sites.(abount 40% increase if compare to 360 sites under previous TIME 3 contract.)

Expect NFCP roll out constantly starting next year.

5G cell is smaller,thus need more infrastructure to support,that is good to redtone.

 

After finish installation work(one-off income),Redtone will continue to do maintainance work for the towers owner(recurring income),that means recurring income will increase over time with more and more tower roll out.(This is a positive surprise because previously i thought MTNS business do not have any recurring income.)

 

Redtone does not build the whole tower,but only handle electronic portion.

MTNS already build up around RM50 million regular revenue so far.

Redtone had participated MCMC's Rural projects for years,now already

became the biggest MTNS player in east malaysia,one of the focus area

under NFCP as sabah and sarawak still largely underserve.

Other than MCMC,MTNS division also servicing big telco like maxis and umobile.

 

Telcos buy necessary electronic equipment from supplier like huawei or sony ericsson,then ask redtone to install and maintain towers on behalf of them.

 

 

2.)Telecommunication Services(TS) business will benefited from 5G in longer term

The business will remain stable as all the income was on regular basis and contributed by more than 15,000 diverse customers from different industry.

 

5G is definitely positive to TS business,but the impact will only be felt in longer term,immediate beneficial will still be MTNS business as infra need to be built first before 5G roll out.

 

Currently,mainly offer fixed line solution to customers due to limitation in mobile transmission,but 5G able to solve the current issue,thus provide another option to customers will become possible in the future,thats means more business opportunity.

 

3.)IDS business have great potential to grow

Few business activities under IDS division

Flexi-craft provide virtual reality(VR)solution to customer,mainly for marketing purposes,can be use in various industry like hotel,property,education,retail,etc.

Not many website positioned with VR experience yet,very young and new market,expect to grow fast in years to come.

Smart farming solution business progress well as more farmers realised the benefit of smart farming.

Based on implementation result so far,smart farming solution is pratically useful in reducing cost and increase crops productivity,provide farmers with double benefit.

IDS is complemented to TS and MTNS business,as redtone not only provided solution but also provide line,cyber security and data center service,thus very competitive.

On track to break even by this financial year(FY 2020).

 

Other important point:

Some shareholders raise queation about the implication of U mobile listing and even potential back door listing,Mr.Lau admitted there are many synergy between Redtone and U Mobile business,as Redtone is servicing corporate customers and involved in MTNS business,on other hand U mobile is servicing retail customers and need to invest in telco towers.

The board will look into any business opportunity between two company as long as can enhance shareholders value.

Currently,Redtone did provide indirect services to U Mobile,but intent to deal directly with U Mobile in the future.

About the potential main board listing,Mr.Lau said he understand the difficulty face by investors(as a shareholder claim margin rules set by investment bank is not friendly to ace market company),and will definitely look into any opportunity to enhance shareholder value.

One of the shareholders asked since the NFCP and 5G might create much more work order to Redtone,is right issue a possible option since company might need more fund to fufill order?Mr.Lau replied Redtone business is on light capital model,no need huge capital to excecute order,furthermore Redtone is almost zero debt and constantly sitting on RM60-70million net cash,so is well prepared to any opportunity.

Lastly,Mr.Lau clarify that RedONE is not owned nor had any relationship with Redtone,many had misunderstood because the name and logo design of the two company is similar,but in fact Redtone had no relationship with RedONE at all.(I am glad to heard this since small telco provider like RedONE hard to compete with big boy like maxis celcom or digi.)

Conclusion:

 

I walk out from AGM with confident after knowing more about Redtone,a good company lead by good management team,i'll said it might be the multibagger company to invest for the next 2-3 year as the industry will be booming soon with NFCP and 5G roll out.

 

All the three businesses had great potential for growth,the earning already on growing trend and should continue to grow in years to come,i am expecting Redtone to break record again and again in years to come.

The only thing that make me sad,was actually don't have much money left in my share account,cant buy more share even Redtone is selling cheap at below 50 cen now.I wish i could buy all the shares below 50 cen,i really do.

Just too bad i am not clever enough to establish IJM back to 50 years ago,ishhhh(*o*)

 

 

Calvin comments:

 

1) NFCP involved huge investment from Telco and MCMC to build more infrastructure

 

MCMC appoints Telco to tender out Infrastructure Network Jobs to Digital players like Redtone, Netx & Binasat

 

2) 5G is definitely positive to TS business,but the impact will only be felt in

longer term,immediate beneficial will still be MTNS business as infra need

to be built first before 5G roll out.

 

Before you can build 5G you must have 4G as a foundation

 

Right now Telekom still has 2.8 Million Copper lines

 

Copper lines can only support 2G

 

What is 2G

See

 

 

Illustrative Editorial Image. Minsk, Belarus, December 20, 2017 vintage phone nokia 3310 isolated on white

 

YES THIS IS WHAT 2G CAN SUPPORT

TO USE iPHONE WE MUST MOVE UP TO 4G

AND FROM 4G WE BUILD 5G

YOU CANNOT BUILD 5G ON 2G COPPER LINES

SO THERE WILL BE LOTS AND LOTS OF WORK FOR DIGITAL INFRAR PLAYERS

IN FACT MALAYSIA NEEDS 20,000 SKILLED WORKERS

See

 NFCP will create an estimated 20,000 jobs with opportunities in construction, operation and maintenance of the new infrastructure.

https://klse.i3investor.com/blogs/Treasureseekers/246433.jsp

 

3) Currently,mainly offer fixed line solution to customers due to limitation in mobile transmission,but 5G able to solve the current issue,thus provide another option to customers will become possible in the future,thats means more business opportunity.

CURRENTLY 5G IS ONLY FOR FIXED LINES. THAT MEANS THAT OUR iPHONES WILL NOT BE OPERATING ON 5G YET

THIS WAS WHAT I GATHERED FROM TALKING TO TELEKOM UNIFI VENDORS

ONLY FIXED 5G LINES IN PROGRESS CURRENTLY

AND THAT IS ENOUGH TO KEEP TELEKOM AND ITS VENDORS BUSY

 

4) Telcos buy necessary electronic equipment from supplier like huawei or sony ericsson,then ask redtone to install and maintain towers on behalf of them.

Yes, Calvin called Opcom CEO Encik Yusree and he confirmed that OPCOM is in JV Partnership with Sony Ericsson

So OPCOM is the provider of Network equipment for Telekom

OPCOM also sell superior fiber optic cables

 

5) Redtone does not build the whole tower,but only handle electronic portion.

Towers go to Ock, Binacom & Sacofa (CMSB)

 

 

6)  Redtone business is on light capital model,no need huge capital to excecute order,furthermore Redtone is almost zero debt and constantly sitting on RM60-70million net cash,so is well prepared to any opportunity.

Same goes for OPcom, Netx & Binacom

These are asset light cash rich companies

Netx save money by not appointing a CEO while Binacom save money by not having a Telephone receptionist. Opcom people work long hours from 9am to 6pm

 

7) These are some inputs when I called OPcom, Netx, Binacom & Netx office

 

Best regards

 

Calvin Tan Research

Singapore

 

Please buy or sell after doing your own due diligence

 

NOTE: CURRENTLY OPCOM IS STILL THE LARGEST MANUFACTURER OF FIBER OPTIC CABLES IN MALAYSIA

TO PREPARE AHEAD OF NFCP1 & NFCP2 OPCOM HAS APPOINTED 2 CEOs INSTEAD OF THE USUAL ONE

 

THIS SHOWS THAT MALAYSIA IS GOING BIG TIME INTO NATIONWIDE FIBERISATION THRUST LIKE NEVER BEFORE

 

AND THIS IS ONCE IN A LIFETIME OPPORTUNITY TO BUY ALL AVAILABLE LISTED DIGITAL STOCKS THAT WILL BENEFIT TREMENDOUSLY FROM 5 YEARS OF FIBERISATION THRUST

 

 

 

 

 

 

 

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Labels: REDTONE

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Chart Stock Name Last Change Volume 
REDTONE 0.52 +0.005 (0.97%) 1,437,700 

  4 people like this.
 
calvintaneng Good morning

Ckk2266 1st to click like
12/12/2019 8:25 AM
calvintaneng YES

SUCCESS BEGETS SUCCESS

REDTONE, OPCOM, NETX, SACOFA (CMSB) & BINACOM WILL ALL RISE AND RISE

See

VERY GOOD!!


See Calvin other chun chun buys

Posted by sandrakkc > Dec 12, 2019 9:48 AM | Report Abuse

Calvin, how much when you first recommended Jtiasa and MKH?

CALVIN HAPPY TO REPLY TO SANDRA

JTIASA WAS FIRST RECOMMENDED AT 55 SEN. NOW 86 SEN OR UP 56%

See https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/201122.jsp

2) MKH buy call was Rm1.35. Now Rm1.70 (Up 25%)
See https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/202259.jsp

AND VERY HAPPY TO ADD ONE MORE

3) TDM at 17.5 SEN. TODAY IS 31 SEN OR UP A WHOPPING 77%

See https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/200704.jsp

SANDRA IS SO SMART & CLEVER!!

LISTEN GUYS

SUCCESS BEGETS SUCCESS!!

GO BUY ALL THESE NFCP BULL STOCKS OF YEAR 2020

NETX
OPCOM
REDTONE
SACOFA (CMSB)
BINACOM

Regards

Calvin Tan
12/12/2019 11:18 AM
michaeloblivion calvin recommended me penergy at 70 cents
15/12/2019 7:29 PM
Huat1 REDTONE is high probability win stock. Hard to lose
15/12/2019 7:55 PM


 

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