TPG Telecom Ltd

TPM Details
 
Results exceeded forecasts: TPG Telecom Ltd (ASX: TPM) stock surged over 5.17% on September 19, 2017 as the group delivered a better than forecasted FY17 results. Under its reported results, TPM witnessed an EBITDA rise of 5% to $890.8 million during the year while Net Profit after Tax enhanced 9% yoy to $413.8 million during the period. Moreover, the group’ target of first milestone of nationwide outdoor service coverage in Singapore before the end of 2018 is on track. TPM made agreements with multiple partners to gain access to a large volume of sites to offer coverage of major metropolitan areas. Their implementation of initial site clusters in Sydney, Melbourne and Canberra is forecasted to finish by mid-2018.

FY18 guidance (Source: Company reports)
 
The group has also increased its total committed debt facilities by a further $750 million to $2,385 million in order to finance its spectrum commitments and planned mobile network builds. While challenges at nbn front might loiter around for some time (about $60 million is expected to be chopped off from FY18 EBITDA owing to nbn margin driven headwinds), the group is expected to witness future growth by creating mobile networks in Australia and Singapore. With the stock currently trading at a lucrative price to earnings level, we give a “Buy” recommendation on this dividend yield stock at the current price of $ 5.49
 

TPM Daily Chart (Source: Thomson Reuters) 

Telstra Corporation Ltd

TLS Details
 
Progressing on net productivity target as planned: Telstra Corporation Ltd (ASX: TLS) continues to focus on productivity and is on track to deliver more than $1 billion net productivity target by FY20. The group even enhanced their target by $500 million and aims to deliver more than $1.5 billion net productivity by FY22. Telstra forecasts benefits to be achieved at a broadly consistent pace. The group has nbn™ market share of 52% with 676,000 new nbn connections. Their NAS income surged 30.6% during FY17. TLS stock lost over 18.1% in the last three months (as at September 18, 2017) at the back of shift in sentiments to be on a weaker side owing to volatility. The FY18 total dividend has also been slashed owing to lower than expected FY17 results (reported NPAT down 32.68%), which is now expected to be at 22 cents per share including both ordinary and special dividend. On the other hand, TLS still witnesses demand for data from devices and has also inked few agreements. Recently, eMite (subsidiary of Prophecy International Holdings) has signed a worldwide licensing deal with TLS to enable cloud based, advanced analytics and dashboard solution for contact centres to be delivered to TLS customers. We maintain a “Buy” recommendation on the stock at the current price of $ 3.65
 

TLS Daily Chart (Source: Thomson Reuters) 

Vocus Group Ltd

VOC Details
 
Increasing market share for Dodo and iPrimus: Vocus Group Ltd (ASX: VOC) delivered 50% yoy rise in underlying NPAT for the 12 months ended 30 June 2017 on a 119% increase in revenue. The group acquired Nextgen Networks in Oct ‘16, which strengthened their international infrastructure projects as well as their network experience. Moreover, in FY17, they reported an organic growth in Consumer NBN subscribers to 178k, taking their NBN market share, including wholesale, to 8.02%. Dodo and iPrimus has 7.3% market share in NBN (ex-satellite) as of FY17 against 6.4% market share at the beginning of the period. The group’s New Zealand business has over 13% market share of UFB with strong momentum in the business leading to ~18% share of UFB connections in Q4 FY17. Lately, the stock has come under pressure owing to challenges in the core business and the potential class action from law firm, Slater & Gordon Limited. On the other hand, the stock has been up 1.7% on September 19, 2017 while the group released its sustainability report. The group’s director, Vaughan Bowen has also increased his interest in Vocus with the acquisition of 106,000 shares through an on-market trade lately. We give a “Hold” on the stock at the current price of $ 2.44
 

VOC Daily Chart (Source: Thomson Reuters) 

Amaysim Australia Ltd

AYS Details
 
Click Energy Group’s contribution boosted performance: Amaysim Australia Ltd (ASX: AYS) surged over 20.1% this month (as of September 18, 2017) and still has a decent dividend yield. The group delivered a statutory EBITDA rise of 35% yoy to $33.8 million in fiscal year of 2017 while statutory net revenue rose 29% yoy to $326.7 million. AYS controlled underlying operating costs in the mobile business by 8% to $45.9 million. The group’s mobile segment performance was strong with closing subscribers of 1.074 million, rising 11%. AYS launched amaysim nbn^TM broadband with the business performing to plan. Click Energy Group’s two months contribution was driven by solid subscriber’s growth and energy usage. Given the result and prospects ahead with increasing subscriber base, we maintain a “Buy” on the stock at the current price of $ 2.10
 

AYS Daily Chart (Source: Thomson Reuters) 

Chorus Ltd

CNU Details
 
Enhancing UFB footprint: Chorus Ltd (ASX: CNU) stock lost over 18.6% in the last four weeks placing them at decent levels (as of September 18, 2017). The group is aiming to add 54,500 rural premises to its ultra-fast broadband (UFB) rollout at an expected communal rollout cost of $135 - $155 million. UFB2 rollout is expected to speed-up by December 2022. 

UFB rollout (Source: Company reports)
 
Further, the group expects that vectored VDSL investment might enhance broadband for up to 360,000 customers in rural and local fiber company areas.We rate a “Hold” on the stock at the current price of $ 3.58
 

CNU Daily Chart (Source: Thomson Reuters) 

Spark New Zealand Ltd

SPK Details
 
Rural Broadband Initiative decision: With the Government’s investing plans of $270 million to roll out Ultra-Fast Broadband to 190 more small towns, and extend rural broadband to another 74,000 households and businesses, Spark New Zealand Ltd (ASX: SPK) recently reported that the Rural Connectivity Group joint venture (a joint venture between the three largest mobile companies - Spark, Vodafone and 2degrees) would be a partner with Crown Fibre Holdings on the Government’s Rural Broadband Initiative and coverage of mobile black spots under the Mobile Black Spot Fund. The group is thus investing a total of $25 million over 5 years in these initiatives. Recently, the group has expanded its available revolving facilities via Spark Finance.  Meanwhile, Spark New Zealand’s reported FY17 NPAT was up 12.97% and revenue from ordinary activities rose 3.3% from last year. Given the benefits expected from recent initiatives,we put a “Hold” on this dividend yield stock at the current price of $ 3.49
 

SPK Daily Chart (Source: Thomson Reuters)

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