PP is issued at 60 sen. One of the analysts has a TP of RM0.75 per share on the pretext of PATMI is RM28.5m and RM33.0m for FYE19 and FYE20 respectively.
Similarly, EBITDA is expected to grow from RM99m to RM108m (FYE19) and RM122m (FYE20).
Of course, those are estimates. However, based on the growth of number of towers & improved tenancy ratio, especially total number has expanded from about 3,000 towers to 4,000 towers. The increase in towers are from Myanmar (300), Vietnam (600), and Malaysia (100) towards last quarter of FYE18 will give OCK a boost to its earnings and EBITDA.
Hopefully they can achieve earnings growth of 20-30% for cumulative 9 months, from the increase in towers and also some secured contracts. Results may be out by end of next week.
Cost today 58 sen is below placee price of 60 sen. Previous placement in 2016 is 81 sen. Interesting. Of course, no placee(s) wants to incur losses, especially RM50m and with holding costs.
Let's see how it works out. It may be an opportunity. More importantly, EBITDA is growing fine from RM60m to RM100m (in 2 years), and estimated to be RM122m (FYE20) by analyst. I believe they can do better than analyst estimate, with Solar and Tower expansions.
And also getting good value from the subsidiary placement in one or two months.
Actually, I agree with sosfinance. It is just 3sen above what the placees paid for their placement shares, which is not totally logical. I’m sure there was some kind of assurance given to placees for them to commit. If it goes below 55, they may as well have bought from the open market. Anyway, that’s just my point of view.
@frank74 the placement price is 60 sen, not 55 sen. The EBITDA of OCK's tower assets only for 2019/2020 is about RM70m. Depends what multiple they can get, conservatively 10-12 times. Not included is the engineering biz and green energy assets.
About 70% is held by financial institution (plus major shareholder). Last year was 74%, 4% being Shariah Funds, which was all sold down. Very low float, like many other Bursa stocks. Disregard the narrow price movements, the results will be good (based on expansion + better tenancy of tower biz).
With another private placement of the subsidiary OST in a month or two (unlock the value of its tower assets), it will allow the Group to expand further in tower assets. If we add up the capex for 3.5 years until 30 June 2019, the Group has spent about RM600m on tower assets, which is sustainable (5-15 years lease rental) and growing.
So, have to be patient for next one to two quarters at least, to see the positive results. Besides PAT, it is also important to monitor the growth of EBITDA (as the towers assets is valued by the market using EBITDA multiples). About 60% of the total EBITDA is from towerco biz, and it is growing.
During PP to any new potential investors, financial forecast projection normal spread for 3-5yrs which means new investors are looking beyond 2020 company performance.
PP at 60sen which is at current mkt price instead of 55-56sen logically not fare to the new investors but bear in mind that they are NOT STUPID.
The new investors are looking forward to annual ROI of 7-10%.
I think on a whole it’s not bad. My concern is, why is the regional revenue almost stagnant when depreciation has almost doubled? Wouldn’t the latter mean that more towers are in play? The profits are holding up, thankfully, because of the Malaysian business, which has picked up again. The tower business needs to contribute more going forward. Not sure if I’m seeing it right
1) Based on Bursa website detailed results, YoY is 21.5% and QoQ is 9.02% (not as shown above, opposite). This is better than analysts estimates.
2) Tower construction order is good, about RM130m.
3) EBITDA is better than analyst's expectation
4) Cash balance is low after net of pledge, as they have bulky trade debtors. Anyway, the latest PP has raised RM52m. And subsidiary is expected to have PP as well to third party.
Judging by how the Malaysian business has been contributing this year. Q4 is going to be very good. FY growth over last year will be respectable. That's my guess.
Spin off of towerco assets as mentioned by analysts soon? This will add about 20-25 sen to OCK Group, although research house 13-35sen. If this is the case, 20 sen is equivalent RM174m, good for further expansion.
0172 OCK OCK GROUP BERHAD MEMORANDUM OF UNDERSTANDING MEMORANDUM OF UNDERSTANDING OCK GROUP BERHAD (OCK OR THE COMPANY)Memorandum of understanding (MOU) with China Information Technology Designing & Consulting Institute Co. Ltd. You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com
MEMORANDUM OF UNDERSTANDING OCK GROUP BERHAD (OCK OR THE COMPANY) Memorandum of understanding (MOU) with China Information Technology Designing & Consulting Institute Co. Ltd. OCK GROUP BERHAD
Type Announcement Subject MEMORANDUM OF UNDERSTANDING Description OCK GROUP BERHAD (OCK OR THE COMPANY) Memorandum of understanding (MOU) with China Information Technology Designing & Consulting Institute Co. Ltd. The Board of Directors of OCK is pleased to announce that the Company has entered into a Memorandum of Understanding on 28 November 2019 with China Information Technology Designing & Consulting Institute Co. Ltd., a subsidiary of China United Network Communications Group Co. Ltd or more commonly known as China Unicom.
A copy of the press release setting out the information on the MOU is annexed herewith for your easy reference.
A detailed announcement in respect of the MOU in compliance with Listing Requirements will be released separately today.
One of Unicom's subsidiary is listed in HK with market cap of USD210 billion (HKD6.68), and a month ago the company is above RM1.0 trillion (HKD8.50). Good news.
Post a Comment
People who like this
New Topic
You should check in on some of those fields below.
Title
Category
Comment
Confirmation
Click Confirm to delete this Forum Thread and all the associated comments.
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Lee1045
126 posts
Posted by Lee1045 > 2019-11-14 20:08 | Report Abuse
Old news, June 3......