Showing posts with label green packet. Show all posts
Showing posts with label green packet. Show all posts

Friday 22 June 2012

Investor's Checklist: Telecom

Shifting regulations and new technologies have made the telecom industry far more competitive.  Though some areas are more stable than others, look for a wide margin of safety to any estimate of value before investing.

Telecom is a capital-intensive business.  Having the resources to maintain and improve the network is critical to success.

Telecom is high fixed-cost business.  Keeping an eye on margins is very important.

Watching debt is also important.  Firms can easily overextend themselves as they build networks.


The price of wireless airtime is plummeting.  Carriers continue to compete primarily on price.


Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey



Read also:
Investor's Checklist: A Guided Tour of the Market...

Tuesday 16 November 2010

Green Packet 3Q net loss narrows to RM13.7m

Green Packet 3Q net loss narrows to RM13.7m
Written by Joseph Chin
Monday, 15 November 2010 19:04


KUALA LUMPUR: GREEN PACKET BHD [] posted net losses of RM13.71 million in the third quarter ended Sept 30, 2010, a decline from the net loss of RM31.84 million a year ago and expects margin erosion in the competitive broadband and voice business segments

It said on Monday, Nov 15 that revenue rose 60% to RM100.89 million from RM63.03 million. Loss per share was 2.1 sen versus eight sen. Green Packet said the net loss was lower in the just ended quarter due to an improvement in turnover.

Of the RM100.89 million in revenue, software, devices and engineering services accounted for RM25.56 million, up 169.4% from RM9.49 million a year ago, broadband services and solutions (RM55.16 million or up 37.7% from RM40.07) and communication/voice services (RM20.17 or up 49.6% from RM13.48 million).

“In line with the government initiative to allocate new spectrum, the broadband and voice business segments are projected to be increasingly competitive with expected margin erosion. Nevertheless, the board of directors expects the performance of the group to improve in tandem with the changing market landscape and planned increase in the subscribers base,” it said.

Green Packet’s total borrowings as at Sept 30 totalled RM237.01 million. Its total turnover was the nine-month period was RM277.71 million compared with RM160.99 million while loss per share was RM56.82 million compared with RM81.93 million.

http://www.theedgemalaysia.com/business-news/177158-green-packet-narrows-losses-3q-net-loss-rm137m.html

Friday 8 October 2010

Blue Sky Potential

There are many listed companies whose shares trade for prices ranging from cents to dollars that fit into one or more of the following categories:
  • The company doesn't yet have a saleable product.
  • The company is making a loss.
  • The company has never made a profit.

You'll find examples of these types of companies among:
  • mineral and oil exploration companies
  • biotechnology or medical companies researching or developing a new vaccine or medical treatment
  • industrial innovation companies developing a new product
  • computer technology companies developing software or new computer hardware.

And the list goes on ...

Shares in these types of companies are priced by the market according to what is known as 'blue sky potential'.  The market factors expected future profitability into the share price, and so companies not currently making a profit may still have a high price if the market anticipates that future profitability may occur.

Tip
It is risky to buy shares in a company whose shares are priced on blue sky potential.


Also read:

Green Packet Announces 10th Consecutive Quarter Of Losses!

Update on Green Packet

Friday 14 May 2010

Investor's Checklist: Telecom Sector

The telecommunication sector is filled with the kinds of companies we love to hate:
  • They earn mediocre (and declining) returns on capital, 
  • economic moats are nonexistent or deteriorating, 
  • their future depends on the whims of regulators, and 
  • they constantly spend boatloads of money just to stay in place.  
Even companies that once boasted wide moats, such as those that control the local phone network, face increasing competition from newer players, such as cable and wireless networks.  Because telecom is fraught with risk, we typically look for a large margin of safety before considering any telecom stock.

Telecom Economics

Building and maintaining a telecom network, whether fixed line or wireless, is an extremely expensive endeavor that requires truckloads of upfront capital.  This requirement provides a substantial barrier to entry and usually protects the established players.  To raise capital, a new entrant must have a great story to tell investors.  The emergence of the Internet, the opening of local networks to competition, and rapid wireless growth during the 1990s gave numerous new players the yarns they needed, which is why the usual barrier provided by huge capital requirements came crumbling down as investors lined up to grab a piece of the action.

While the effects of this massive infusion of capital are still being felt in the industry, ongoing capital needs have sunk many new entrants.  Even a mature telecom firm will need to invest significant capital to maintain its network, meet changing customer demands, and respond to competitive pressures.

Because of the enormous cost to build a network, carriers typically have very low ratios of sales to assets (asset turnover ratios).  Even a mature carrier typically generates only around $1 per year in sales for each $1 of assets invested.  But building a business of ample size to support interest payments and ongoing capital needs is very important.  Because fixed costs are so high, it's imperative for carriers to have enough customers over which to spread the costs.

Squeezing as much profit from the sale as possible is also crucial.  While size again plays a role here, a telecom company must be able to send bills, provide customer service, maintain the network, and market services efficiently.  A mature company, either fixed line or wireless, should expect to earn operating margins between 20 percent and 30 percent.  Short of this level, it is extremely difficult to earn an attractive return on invested capital, given the slow pace at which assets turn over.

With so many companies raising money and building networks in the late 1990s, the volume of business needed to support all these huge investments never materialised.

Conclusion:

The telecom sector of tomorrow will look nothing like the sector of the past.  Competition is far greater throughout the industry and economic moats exceedingly difficult to come by.  The future of the industry will be shaped by regulatory and technological changes, which means that financial strength and flexibility are likely to be what separate successful firms from unsuccessful ones over the next few years.

Investor's Checklist:  Telecom
  • Shifting regulations and new technologies have made the telecom industry far more competitive.  Though some areas are more stable than others, look for a wide margin of safety to any estimate of value before investing.
  • Telecom is a capital-intensive business.  Having the resources to maintain and improve the network is critical to success.
  • Telecom is high fixed-cost business.  Keeping an eye on margins is very important.
  • Watching debt is also important.  Firms can easily overextend themselves as they build networks.
  • The price of wireless airtime is plummeting. Carriers continue to compete primarily on price.


The Five Rules for Successful Stock Investing
by Pat Dorsey

A quick look at Green Packet (14.5.2010)



A quick look at Green Packet (14.5.2010)
http://spreadsheets.google.com/pub?key=tV-54uu4_jzVGfNlURI6rhg&output=html

Business Prospects (Extracted from its Quarterly Report)
The Group's main revenue contributor, the broadband and voice business segment is projected to be competitive even with all the major service providers challenging for better market share by way of intensive awareness events and aggressive marketing campaigns. The broadband market in Malaysia is however projected to see further strong growth in demand over the next few years. The Group projects to achieve better market traction with focus on improving service quality. The Group also expects improvement in the software and application business in line with the growth of more WiMAX Networks globally. Accordingly, the Board expects the performance of the Group to improve for the financial year ending 31 December 2010.

Friday 13 November 2009

Green Packet - behind the headline figures

Green Packet sets ambitious profit target
By Goh Thean EuPublished: 2009/09/24

GREEN Packet Bhd (0082), a telecommunications and broadband service provider, has set a net profit target of RM1 billion for 2013, driven by a maturing broadband and solutions business.

The company posted a net loss of RM54.98 million for the financial year ended December 31 2008.

"It's an ambitious goal. That's why we are really working hard on that. We believe both our business pillars of solutions and service provider will grow. By then, we will have more than one million subscribers on broadband space," group managing director Puan Chan Cheong told Business Times in an interview.

The company expects to sign up 200,000 subscribers by year-end, from 35,000 in the first quarter of 2009.
"By end of the third quarter, we should have more than 100,000 subscribers. We believe that we can sign up over 30,000 subscribers per month for the final quarter," he said.

Green Packet expects revenue to increase more than threefold to RM300 million this year, from RM88.43 million in 2008.

"Our first-half 2009 revenue was already 11 per cent more than what we had in the entire 2008. We expect the momentum growth to be bigger in the second half and we believe we can comfortably achieve RM300 million this year and RM1 billion two years later," he said.

The company offers broadband services to homes and offices using the WiMAX (Worldwide Interoperability for Microwave Access) technology.

To achieve its subscriber target, the company would need to expand its broadband coverage area, so that more people will have the opportunity to subscribe it.

"In terms of sites, we are also on track to hit 700 sites, or 2,100 base stations by year-end," he said.

Over the next two years, the company will be aggressively expanding its coverage and acquiring broadband customers. When its subscriber base hits the critical mass, it is expected to launch its new service - mobile voice.

"We are looking to launch mobile voice service in 2011. We can do it by ourselves, but initially, we will be looking at domestic roaming. On areas we don't have coverage, then we will fall back to existing operator's network," said Puan, who expects to sign up more than two million mobile voice customers by 2013.

It also develops WiMAX customer-premises equipment (CPE), such as the WiMAX modems. For the first half, it has delivered over 150,000 WiMAX CPEs to 35 operators worldwide.

"The estimation for WiMAX product shipment world is going to be about 1.6 million to 1.7 million this year. We aim to capture 20 per cent of the world's market shipment, or to ship some 350,000 units of CPEs this year," he said.

Besides developing CPEs and offering broadband services, it also develops telecommunications software - such as its InTouch connection management software - for operators.

The InTouch connection management solution, allows the user to integrate multiple wireless network.

Developing the solutions pillar is critical for Green Packet's bottomline growth, as it commands higher margins than some of its other businesses and it helps the company to strike a balance.

"Moving forward, we see half of our revenue coming from our service provider (WiMAX broadband) business and the other half from solutions.

"In terms of topline for our solution business, 30 per cent will come from software and 70 per cent will come from CPEs. However, for bottomline, software will contribute 50 per cent of the profit for the solution business," he said

http://www.btimes.com.my/Current_News/BTIMES/articles/gpkt21/Article/index_html


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Green Packet: RM500m more needed to widen 4G coverage
By Zuraimi AbdullahPublished: 2009/11/13



GREEN Packet Bhd (0082), which announced its third quarter results yesterday, will need up to RM500 million in capital expenditure (capex) in the next 12-18 months to increase its 4G Wimax coverage nationwide to 65 per cent.

This does not include a RM155 million capex it plans to spend first over the next three quarters to raise the high-speed broadband service coverage to 45 per cent.

Green Packet managing director C.C. Puan said it had so far invested RM337 million to roll out the 4G service.

The company's 4G service, known as P1 and run by subsidiary Packet One Networks (Malaysia) Sdn Bhd, now covers 25 per cent of the peninsular.
Puan said about RM400 million of the RM500 million capex would be raised from vendor financing and borrowings.

The remaining RM100 million should come from equity and convertible debts, he told reporters at a briefing on Green Packet's interim results in Petaling Jaya yesterday.

The company has group cash and cash equivalents of RM174 million as of end-September. With another RM65 million from bank and vendor facilities, it has total funding of RM239 million, more than the RM155 million required for the next nine months.

Meanwhile, Green Packet's revenue for the third quarter to September 30 this year rose 11.5 per cent to RM63 million from RM56.5 million in the preceeding quarter.

But it made a net loss of RM32.9 million mainly due to the investments in P1's deployment and activities.

A turnaround is possible starting from the middle of next year as he said P1 should break even in the first quarter on 2010, which could push Green Packet into the black as early as first half of next year.

Green Packet's 4G subscribers have increased to 100,000 in 14 months and the company plans to double it to 200,000 in the next two months.

The company plans to extend its 4G service to Sabah, Sarawak and Singapore and increase exports of its 4G devices by several fold next year, Puan said.

http://www.btimes.com.my/Current_News/BTIMES/articles/ket/Article/index_html


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Green Packet suffers bigger loss
Published: 2009/11/12

Green Packet Bhd's pre-tax loss for its third quarter ended Sept 30, 2009, rose by 200 per cent to RM32.377 million from RM10.784 million in the same quarter last year.

This was due to its investment in subsidiary Packet One Networks (M) Sdn Bhd (P1)'s deployment plan and activities, Green Packet said in a statement today.

However, its revenue increased by 246.9 per cent during the third quarter to RM63.035 million from RM18.172 previously.

Green Packet said P1's subscriber growth increased by 44 per cent in the third quarter as compared to the second quarter.

"In line with the group's business strategy, we are investing heavily in our 4G WiMAX operator, P1, which is rapidly expanding across Malaysia and gaining momentum in terms of subscribers," said Green Packet's group managing director and chief executive officer Puan Chan Cheong.

Puan said Green Packet's advertising and promotion activities had increased substantially, with the company moving to mainstream broadcast media to introduce its service packages to the masses.

"The quantum of subscriber increase is exciting, and we target for P1 to be EBITDA (earnings before interest, taxes, depreciation, and amortisation) breakeven by first quarter 2010," he said.

P1, now the only nationwide 4G WiMAX operator in the country, plans to extend its network to East Malaysia and Singapore next year.

Green Packet said it has healthy cash reserves, having recently conducted a rights issue and announced a proposed private placement expected to be completed by the end of this financial year.

The proposed private placement is expected to contribute positively to the group's future earnings and should result in an increase in the company's total issued and paid-up share capital.

"Our fund raising is part of our business strategy, which requires working capital for capital expenditure and operating expenses, including the deployment of 4G WiMAX infrastructure in Malaysia and other overseas markets," Puan said.

Green Packet said its products and solutions have increased their shipments in recent months and were profitable since the second quarter.

The group is also expected to announce contracts with East European and American operators, and launch new products before the year-end. -- Bernama

http://www.btimes.com.my/Current_News/BTIMES/articles/20091112211908/Article/index_html