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Telekom Malaysia subsidary IPO
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level13
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22-Jun-2007 16:15
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News on capital repayment http://www.tm.com.my/images/about_tm/investment_rel/announcement/2007/Ann%20Celcom%20CapRepayment.pdf to be completetd in 3 mths. http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_41dbf418-cb73c03a-13425450-3f448a71 for those who feels that the mother share is too high, the CIMB CD call warrant is an attractive bet. currently at RM0.165. the conversion ratio is 2:1. strike price is RM11. so at RM11.33 the warrant will be in the $. still abt 3 mths to expiry. we shall see...... CHEERS! |
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level13
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22-Jun-2007 15:55
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The news are out. http://www.indiaprwire.com/businessnews/20070620/23033.htm http://biz.thestar.com.my/news/story.asp?file=/2007/6/20/business/18073334&sec=business |
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level13
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22-Jun-2007 11:34
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TM looks a safe bet below RM11.00. The supposed merger of TM's 49% entity, Spice Communications, with Idea Cellular in India have been dismissed. TM should be in the limelight with Spice Communications' IPO due in the next week. Following the IPO, TM will end up with a 39% stake while the Modi group will have 41%. Growth for Spice will come from the Karnataka and Punjab areas: collectively they have an 80m population. TM's overseas contribution to revenue is around 28% and should rise further in the coming quarters. The stock has underperformed KLCI by -22% over the last 12 months. Dividend yield around 3.8%-4.0%. Celcom will be making a capital repayment exercise to TM worth RM730m, finally.
The kicker will be Spice's valuation. When TM bought its stake in Spice, the company was valued at US$365m in March 2006. Based on the staggering IPO price of 46 rupees (110x FY2008 earnings, or 8x EV/Ebitda): the valuation of Spice is now US$745m. This will result in an exceptional gain of RM380m for TM. Though a one-off item, its still significant.
TM should move higher after being ignored for so long. The valuations now are undemanding. Looking for RM12.50-RM13.00 as fair value targets.
Also the CIMB CD call warrant on TM looks to be a decent bet.
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