Stocks’ Details
 

TPG Telecom Ltd (ASX: TPM)

Reinforcing confidence: TPG Telecom at its AGM, demonstrated some distress with regards to the way the stock price has been moving on ASX in the past few months (falling over 10% this year to date as at December 05, 2017) at the back of investors smashing the stock in light of shortcomings posed by National Broadband Network. However, the group has clarified that there is potential in the long run given the investment in mobile and fibre infrastructure. The transformation for next leg of growth has been commenced as per the group, and it aims to leverage the opportunities proffered by its mobile projects. Further, FY17 performance of the group with 4% reported revenue growth and 9% reported NPAT growth has been a resilient one tracking well with past nine years. TPM’s broadband subscribers have risen to 1.94 million as at end of FY17. Based on a healthy foundation, the group’s FY18 results are tracking well with Singapore project progressing well and on track for coverage by December 2018. Agreements with multiple partners in Australia for mobile network rollout for small cell and macro network have been put in place. TPM has also amended and extended its debt facilities securing improved pricing and terms and extending the maturities of the facilities.

Given the efforts and potential, we maintain a “Buy” at the current price of $6.11


Guidance (Source: Company Reports)
 

Telstra Corporation Ltd (ASX: TLS)

Witnessing a rebound: Heavyweight Telco, Telstra’s stock has risen 6.49% in last five days (as at December 05, 2017) with a lot of traction received and building positive sentiments at the back of the latest earnings revision. It is worth noting that the stock has been down 30% this year to date. The group particularly, revised FY18 guidance as a result of the impact of nbn co.’s announcement on ceasing sales on hybrid fibre co-axial (HFC) technology for six to nine months from 11 December 2017, as well as nbn co.’s Corporate Plan 2018. As per the revised guidance, the FY18 total income is expected to be $27.6b to $29.5b after $0.7b reduction, EBITDA to be $10.1b to $10.6b after $0.6b reduction, and free cash flow to be $4.2b to $4.7b after $0.2b reduction. The delay from nbn is however viewed as an opportunity for the group in the short-term. We maintain a “Hold” stance on Telstra at the current price of $3.63

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