TPG Telecom

TPM Details

Offering tight competition in Australia: TPM is offering strong competition to established market players like Telstra and building a mobile network in Australia via their present advanced technology for ~$1.9 billion. This comprises 700 MHz spectrum wherein the spectrum license starts from 1 April 2018 and expires on 31 December 2029. TPG has a new entrant advantage as they don’t need the support of legacy equipment (for 2G/3G networks) for deployment. Accordingly, TPM is targeting to enhance their market share from established players while focusing on the operational efficiencies.

Expanding in Singapore: The group won the new Entrant Spectrum Auction in Singapore. They acquired all the spectrum available at the auction (being 2 lots of 2x5MHz of 900MHz spectrum and 8 lots of 5MHz of 2.3GHz spectrum) for a total purchase price of S$105 million. Moreover, they expect to further spend in the range of S$200 million to S$300 million to establish a mobile network with nationwide coverage by September 2018. TPM intends to fund via their current debt facilities and cash generated from their Australian operations. They are aiming to deliver the services to customers by 2018 and targeting EBITDA positive when they achieve a market share in the range of 5% and 6%. Meanwhile, the group also has major investor, Washington H. Soul Pattinson who has >25% of stake worth >$1 billion. We believe that the stock is currently trading at a reasonable level and recommend a “Buy” at the current market price of $5.47


TPM daily chart; (Source: Thomson Reuters)

Woolworths Limited

WOW Details

ACCC releases Statement of Issues on BP's proposed acquisition: The Australian Competition and Consumer Commission has flagged preliminary concerns regarding the proposed acquisition by BP Australia Pty Ltd of Woolworths Limited’s network of retail service station sites. The ACCC has outlined its preliminary view that the proposed acquisition may substantially lessen competition for the retail supply of fuel across metropolitan areas as the transaction would reduce the number of major rivals in fuel retailing, and see retailers face less competitive pressure to keep their prices low and as a result, motorists may end up paying more at the pump. The ACCC is also analyzing the effect of the proposed acquisition on local markets in the vicinity of individual Woolworths’ service stations across Australia and will publish preliminary views on local market issues in coming weeks. The ACCC’s final decision is scheduled for 26 October 2017. Following the proposed acquisition, BP and Woolworths propose to enter into a commercial alliance including a new retail convenience offering, called Metro@BP. Woolworths’ shopper docket discounts and loyalty program would also be available at certain BP sites. We give a “Hold” recommendation on the stock at the current market price of $26.75


WOW daily chart; (Source: Thomson Reuters)

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