Stock Name: GPACKET
Company Name: GREEN PACKET BHD
Research House: OSK
KUALA LUMPUR: OSK Investment Research has re-initiated coverage on GREEN PACKET BHD [] with a buy call at RM1.08 and target price RM1.30 and said it liked the company's turnaround story and its exposure to the thriving wireless broadband market via the fledgling WiMAX service.
It said the target price was based on eight times FY11 EV/EBITDA to mark the company's return to the black at EBITDA level, the first since FY07.
This is premised on superior revenue growth of >100% y-o-y for FY10 and 59.6% y-o-y for FY11 from (i) robust demand for its WiMAX services arising from the aggressive coverage expansion; (ii) strong customer premise equipment sales; and (iii) the rapid fall in subscriber acquisition cost, it said.
OSK Research said despite the aggressive go-to-market strategy heavily weighing down its earnings since commercial rollout in August 2008, Green Packet's longer-term prospects appear attractive with losses set to bottom out by year-end upon achieving a critical mass of subscribers.
"The key share price re-rating catalysts are (i) a quicker than expected earnings turnaround; (ii) strong subscriber additions; and (iii) positive industry outlook and global developments on the WiMAX front," it said.
Company Name: GREEN PACKET BHD
Research House: OSK
KUALA LUMPUR: OSK Investment Research has re-initiated coverage on GREEN PACKET BHD [] with a buy call at RM1.08 and target price RM1.30 and said it liked the company's turnaround story and its exposure to the thriving wireless broadband market via the fledgling WiMAX service.
It said the target price was based on eight times FY11 EV/EBITDA to mark the company's return to the black at EBITDA level, the first since FY07.
This is premised on superior revenue growth of >100% y-o-y for FY10 and 59.6% y-o-y for FY11 from (i) robust demand for its WiMAX services arising from the aggressive coverage expansion; (ii) strong customer premise equipment sales; and (iii) the rapid fall in subscriber acquisition cost, it said.
OSK Research said despite the aggressive go-to-market strategy heavily weighing down its earnings since commercial rollout in August 2008, Green Packet's longer-term prospects appear attractive with losses set to bottom out by year-end upon achieving a critical mass of subscribers.
"The key share price re-rating catalysts are (i) a quicker than expected earnings turnaround; (ii) strong subscriber additions; and (iii) positive industry outlook and global developments on the WiMAX front," it said.
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