Comments   We are adding 40,000 REDTONE-WA @ RM0.405 each to our Thematic and Growth Portfolios. We believe REDTONE is on track to report its record-high profit in its upcoming 4QFY13 results by the end of July. Meanwhile, the recent partner with Johor’s Royal family on bidding the digital terrestrial television broadcast (“DTTB”) infrastructure contract may provide an immediate catalyst to the share price should the company win the bidding in the later stage. At present, our target price for REDTONE is RM0.75 (based on a targeted FY14 PER of 14.5x (+0.5 SD), implied a target price of RM0.50 to the group’s warrant. Note that, the group has a total warrant outstanding of 162.4m shares (based on Bloomberg estimate) with a strike price of RM0.25. The warrant is set to expire on 3/4/2015.

Source: Kenanga