Stock Name: GPACKET
Company Name: GREEN PACKET BHD
Research House: HWANGDBS
Green Packet Bhd
(June 30, 97.5 sen)
Maintain buy at RM1 with a lower target price of RM1.60 (from RM1.75): South Korea's SK Telecom is acquiring 25.8% of Green Packet's WiMAX subsidiary Packet One Networks (Malaysia) Sdn Bhd (P1) for US$100 million (RM324 million) cash. The price for the P1 stake is 6% below our fair value. SK Telecom's purchase price implies a valuation of US$389 million for P1. This acquisition also dilutes Green Packet's effective stake in P1 to 57% from 75% previously.
SK Telecom is known globally for its success in South Korea's wireless broadband segment. Its commitment to P1 signals its confidence in Green Packet's management and the healthy prospects of Malaysia's broadband market. But we see few synergies, besides operational expertise, that it can transfer to P1.
There is a minimal 1% reduction in Green Packet's group net loss following the US$100 million cash injection into P1. We have lowered our sum-of-parts target price for Green Packet to RM1.60 because of its diluted stake in P1. We remain optimistic about Green Packet's long-term prospects both in the Malaysian broadband space and its regional telco solution sales. ' HwangDBS Vickers Research Sdn Bhd, June 30
This article appeared in The Edge Financial Daily, July 1, 2010.
Company Name: GREEN PACKET BHD
Research House: HWANGDBS
Green Packet Bhd
(June 30, 97.5 sen)
Maintain buy at RM1 with a lower target price of RM1.60 (from RM1.75): South Korea's SK Telecom is acquiring 25.8% of Green Packet's WiMAX subsidiary Packet One Networks (Malaysia) Sdn Bhd (P1) for US$100 million (RM324 million) cash. The price for the P1 stake is 6% below our fair value. SK Telecom's purchase price implies a valuation of US$389 million for P1. This acquisition also dilutes Green Packet's effective stake in P1 to 57% from 75% previously.
SK Telecom is known globally for its success in South Korea's wireless broadband segment. Its commitment to P1 signals its confidence in Green Packet's management and the healthy prospects of Malaysia's broadband market. But we see few synergies, besides operational expertise, that it can transfer to P1.
There is a minimal 1% reduction in Green Packet's group net loss following the US$100 million cash injection into P1. We have lowered our sum-of-parts target price for Green Packet to RM1.60 because of its diluted stake in P1. We remain optimistic about Green Packet's long-term prospects both in the Malaysian broadband space and its regional telco solution sales. ' HwangDBS Vickers Research Sdn Bhd, June 30
This article appeared in The Edge Financial Daily, July 1, 2010.
No comments:
Post a Comment