Chorus Ltd

CNU Details

Rising customers switching to broadband: Chorus Ltd.’s (ASX: CNU) stock moved up 3% on October 13, 2017 while the group’s 53% of broadband connections are now on VDSL or fibre as at the first quarter of 2018 which is an increase from 45% as at 30 June 2017. Over 50,000 connections were added to VDSL, which is the highest increase ever.The field force productivity is also strong wherein over 40,000 new fiber connections are built while fiber uptake across all Chorus UFB areas are currently 39%, with Blenheim leading at 47% uptake.


Better connection speeds (Source: Company reports)
 
With video streaming driving broadband usage, the group reported 1,240 gigabits per second average network throughput at 9pm as in September 2017, which is an increase against 1,084 Gbps in June 2017. Over 162GB monthly average household data is used in September (128GB average on copper broadband; 251GB on fibre), which is a rise from 155GB in June 2017. On the other hand, total fixed line connections declined by 20k to 1,582,000 and total broadband connections declined by 2k to 1,184,000. We give a “Hold” recommendation on the stock at the current price of $ 3.62


CNU Daily Chart (Source: Thomson Reuters)

Spark New Zealand Ltd

SPK Details

Boosting capital position:Spark New Zealand Ltd (ASX: SPK) recently priced an issue of A$150 million with 10-year fixed rate bonds maturing on 20 October 2027 through the subsidiary Spark Finance. The group intends to use these funds to refinance their future debt maturities. This issue is forecasted to be rated A- by S&P Global and will provide a strategic funding source. Meanwhile, the group offered its customers with several options including moving to newer technologies like wireless broadband and fibre, moving Xtra email to a NZ-based provider, and keeping major resources into improving the Spark HMB customer experience and winning new Spark Digital customers. Their New Zealand program of shifting customers from legacy copper to fast fibre and wireless broadband, has charged ahead. The group enhanced their Wireless connections to 84,000 as of FY17 as compared to 72,000 in prior corresponding period (pcp) while fibre connections rose to 172,000 against 73,000 in pcp. They made partnerships with Netflix and Spark Arena, to complement their Spotify and Lightbox offerings. On the other hand, the industry still faces challenges in terms of attaining profitable growth given the level of competition. We thus give a “Hold” recommendation on the stock at the current price of $ 3.28


SPK Daily Chart (Source: Thomson Reuters) 

Telstra Corporation Ltd

TLS Details

Sailing through a rough period:Telstra Corporation Ltd.’s (ASX: TLS) stock corrected over 32.4% in this year to date (as of October 12, 2017) at the back of concerns around the competitive scenario and weaker than expected FY17 performance. Further, the rejection from nbnco on the proposal to monetise a portion of locked-in recurring nbn receipts has also weighed against the stock. On the other hand, the group has built a diversified portfolio and has a decent mobile network. The group is also putting efforts with respect to increasing the productivity target by $500 million and delivering more than $1.5 billion net productivity by FY22. We give a “Buy” recommendation on the stock at the current price of $ 3.52


TLS Daily Chart (Source: Thomson Reuters) 

Vocus Group Ltd

VOC Details

Restructuring the board: Vocus Group Ltd (ASX: VOC) has forecasted an underlying EBITDA in the range of $370-390 million for FY18 despite many challenges, and underlying NPAT is expected in the range of $140-150m. VOC has lately appointed former M2 chief executive Vaughan Bowen as its new chairman and telecommunications veteran Bob Mansfield as his deputy under a board renewal process. The group aims to recover the value and credibility lost over a disappointing last year. The shares of the group came under pressure in FY17 owing to profit downgrades and poor integration of acquisitions. The news of potential class action from law firm, Slater & Gordon Ltd also impacted the group. While Vocus is putting efforts towards turning around the faltering business for a better future, we give a “Hold” recommendation on the stock at the current price of $ 2.36


VOC Daily Chart (Source: Thomson Reuters)

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