Dear Investors & Traders, 

Last Friday Gpacket share price suddenly gone Limit Up to a new high of Rm1.27 (maximum upside 30%)

That piqued my interest in Redtone

From experience I know if one Stock in an industry goes up the best course of action is to find similar identical stocks in the same industry which have not moved as yet. Like the Dot.Com bull run in year 2,000 AD at the turn of the millenium when US Tech stocks went up in a bull run. Malaysia Tech stocks like MPI also followed. MPI went up from Rm5.00 to Rm50,000 for a 1,000% increase

Early April Calvin saw Glove Stocks started to move so he bought Comfort Glove at 88.5 sen & Supermax at Rm1.73. Then both moved up. Knowing that Top Tier One Gloves have moved and then Tier 2 like Comfort glove also moved Calvin started to search for Tier 3 laggards like Adventa,

See, Aventa buy call at 57 sen jumped to over Rm1.30 in a very pent up bull charge. Others like Es_Ceramic, Luxchem, Mtag, Prolexus also followed moving up in the health care bull run 

So Greenpacket Limit Up is a signal that NFCP stocks might now come into focus

See how similar Gpacket & Redtone businesses below

Business Background

Green Packet Bhd is engaged in the business of investment holding, research and development, marketing and distribution of wireless networking and telecommunication products, networking solutions, communication services, and other high technology products and services. The business of the company operates in various segments that include Solution, Broadband Services, Communication Services, and Elimination. The Solution and Broadband service generate maximum revenue for the company. Geographically the company exports its services to the United States of America, Taiwan, Hong Kong, Bahrain, and Singapore.

 

Business Background

REDtone International Bhd is a digital infrastructure and services provider that offers services under three categories that are Telecommunications Services which offers data and voice services to government, enterprises, and small and medium enterprises (SMEs), Managed Telecommunications Network Services (MTNS) which includes building, maintaining and operating large scale WiFi hotspots, radio access network (RAN) infrastructure and fibre optic infrastructure, and Industry Digital Services (IDS) which includes data centre services, internet of things (IoT) services, cloud services and applications, and healthcare solutions to enterprises, government and the healthcare industry. The company’s Telecom services generate maximum revenue for the company.

If you read more carefully you will notice that Redtone Business is more comprehensive & solid.

 

Now last quarter Redtone was positive while Gpacket was negative. Redtone also pay a dividend while Gpacket was nil. GreenPacket has high borrowings while Redtone has a Net Cash of over Rm40 Millions

From here we see Redtone is the laggard to buy since Gpacket already run up so high and so fast.

We don't chase high and hope to sell higher. We take the defensive course of buy low. And then wait for it to rise.

Now let's dig deeper into Redtone's prospects

1st Can expect Redtone to increase its dividend

Redtone already gave 1 sen dividend last year. Could REDtone give out more dividend in future?

Yes, very possible.

Why?

The answer is this.

REDtone has been giving out yearly loan interest to REDtone loan stock without fail for the last 10 years at 2.75% interest.

See

KLSE: REDTONE-LA (0032LA)

REDTONE INTL - ICULS 2010/2020

 

 

 

03-Feb-2020	25-Feb-2020	INTEREST	Interest Payment	2.7500%
04-Feb-2019	19-Feb-2019	INTEREST	Loan Stock Interest	2.75%
06-Feb-2018	20-Feb-2018	INTEREST	Loan Stock Interest	2.75%
03-Feb-2017	17-Feb-2017	INTEREST	Loan Stock Interest	2.75%
22-Jan-2016	10-Feb-2016	INTEREST	Loan Stock Interest	2.7500%
23-Jan-2015	09-Feb-2015	INTEREST	Loan Stock Interest	2.75%
27-Jan-2014	12-Feb-2014	INTEREST	Loan Stock Interest	2.75%
25-Jan-2013	13-Feb-2013	INTEREST	Loan Stock Interest	2.75%
26-Jan-2012	14-Feb-2012	INTEREST	Loan Stock Interest	2.75%
09-Feb-2011	22-Feb-2011	INTEREST	Loan Stock Interest	2.75%

For 10 years REDtone has consistently paid out 2.75% interest to REDtone loan stock. Finally this year Loan Stock is converted to REDtone mother share and no need to pay further interest. After this REDtone might increase its dividend from 1 sen

Now if REDtone increase its dvidend from 1 sen

to 2 sen?

Then at 47 sen its yield will be 4.2%

If 2.5 sen? Then its yield will be 5.3%

If 3 sen then 6.3%

With little need for Capex an IT company like REDtone could easily scale up its dividend payout

2) REDtone Already Secured Job in Sri Lanka

KUALA LUMPUR (Oct 2): REDtone MEX Sdn Bhd has won an RM130 million contract to provide nationwide medical imaging, filmless radiology information system infrastructure and network connectivity to 20 of the largest hospitals in Sri Lanka, including the national hospital in Colombo.

REDtone MEX is 56% owned by REDtone International Bhd, while the remaining 44% stake is held by REDtone MEX’s chief executive officer Yee Kar Fong via his private investment vehicles — People Health Sdn Bhd and Dolphine Bay Ventures Ltd.

Under the contract, REDtone MEX will set up a teleradiology command centre in a secured datacenter with a telecommunications operator, enabling radiologists to remotely store, retrieve, view and analyse images. Artificial intelligence (AI), a core component of the system, will facilitate analysis of critical diseases, while improving patient diagnosis and treatment.

Training will also be provided to medical personnel and technical teams across the country.

“The command centre and use of AI will drive efficiency and productivity gains by pooling together radiologists and medical specialists from various fields to promptly diagnose, improve
treatment plans and prescribe treatments to patients speedily, especially in the rural areas. This should, over time, improve the quality of healthcare services in Sri Lanka,” said Yee in a statement today.

“In addition, the Sri Lankan Government can derive significant cost savings with the implementation of this system as the current practice of buying radiology films, printing, distribution and storage is inefficient and expensive.”

Yee pointed out that the win also provides REDtone MEX with new opportunities to expand its footprint to offer nationwide services in countries which are benefiting from China’s Belt and Road initiative.

The healthcare industry in Sri Lanka currently faces various challenges, including medical care delivery turnaround time, rapid changes and adoption of expensive diagnostic technology, large digital storage needs, shortage of radiologists and rising costs.

In Oct 2019 REDtone already won a Rm130 Millions job contract in Sri Lanka

3) REDtone thru U-Mobile already secured Job Award indirectly in NFCP1

See

NFCP 1 : AWARD AND COMMENCEMENT OF PROJECT

PART 2

DUSPs: SCOPE OF WORK UNDER NFCP 1

•

MAXIS BROADBAND SDN BHD AND U MOBILE SDN BHD

 

Scope of work:

1.

To design, supply,

install, test,

commission and

operate network

service equipment

and services

2.

To provide minimum

3G and 4G services

with an average speed

of 30Mbps, via RAN

sharing solution

 

UMOBILE ALLOTED 50 SITES

 

From here we can see that REDtone already secured job award in NFCP1 

 

Because UMobile does not install Network service RADIO ACCESS NETWORK ON TOWERS

 

Ths job is outsoursed to REDtone just as KFC does not rear its own chicken but outsource its purchase from other chicken farmers

 

Now we await more jobs for REDtone from MCMC NFCP2 & also from TELEKOM as REDtone has been doing business with TELEKOM for many years already

MCO has enhanced & Quickened the Need for Internet connectivity to the Rural areas

When MCO lock-down was in progress both Urban & Rural Schools were closed. All must go e-learning on-line

But it was found that Internet connectivity in the Rural Kampungs were poor & in many area there was no internet radio signal

Now Malaysia Govt will have to speed up NFCP Fiberisation as the need is great

REDtone being an innovative company has also launched "Flexi Craft" This New Tech just come in ontime as MCO lock-down prevent people from visiting showroom & show houses. Cannot go & View? No problem? Thru Flexicrash you can view all the details in the comfort of your own home without going to the site personally

See

https://www.redtone.com/virtualreality/

REDtone is a Company geared for THE FUTURE

And the "FUTURE" is Bright for REDtone

REDtone price now is 47 sen

Near term target price is 60 sen to 80 sen

Longer term target price is Rm1.00 to Rm1.20

Best regards

Calvin Tan Research

Singapore

Please buy or sell after doing your own due diigence. In doubt please consult your Remisier or Fund Manager

REDtone WiMax Communication Towers

Kota Kinabalu

NOTE: FGV EDOTO WILL BUILD THE METAL TOWERS BUT THE RADIO DUM DISC AND INTERNET FIBER OPTIC IS DONE BY REDTONE

AND REDTONE IS THE EXPERT FOR RURAL RAN (RADIO ACCESS NETWORK)