Instacom to transfer to Bursa Malaysia main board after soaring 1H profits: KUALA LUMPUR, Sept 9 — Instacom Group Berhad (“Instacom”), buoyed by its strong first-half results for the current financial year, is working with its principal sponsor, RHB Investment Bank Berhad, to transfer to the Main Board of Bursa Malaysia by year-end 2013 or first quarter 2014. For its recent second quarter, Instacom’s group profit before tax soared to RM7.630 million (Q1 2013 RM6.956 million) from record revenue of RM36.302 million (Q1 2013 RM30.210 million), soaring 218.4 times over the RM35,000 posted last year. Cumulatively, 1H FY13 net profit climbed to RM14.5 million off unprecedented group revenue of RM66.5 million. Compared with the financial performance of Instacom’s subsidiary companies in 2012 (revenue RM92.6 million; net profit: 15.7 million), Instacom is on course to achieve double-digit growth for the current financial year. Instacom also announced in May that the company had received and accepted a letter of award for the supply, installation, testing and commissioning of telecommunication network and infrastructure together with engineering works throughout the state of Sarawak. The value of this project is RM205 million, and is expected to contribute positively to Instacom’s earnings and net assets for financial years ending 2013 to 2015. Meanwhile, Instacom’s bonus warrants — Instaco-WB — was listed on Bursa Malaysia this morning as reward to shareholders in line with the company’s strong balance sheet and robust growth. The warrants also provide potential investors with a lower entry point to invest in Malaysia’s leading end-to-end solutions provider for the telecommunications industry. The company is confident of securing more projects of significant size in the foreseeable future, including the laying of fibre works in Johor, which is estimated at being upwards of RM50 million. “The telecommunications industry is growing in leaps and bounds as Malaysia moves into the LTE (long-term evolution) era, with major operators looking to expand their data earnings,” said CEO Anne Kung, citing a report by telecoms equipment firm, Ericsson. “Mobile data traffic in Malaysia should double this year in line with the global trend.” Ericsson foresees mobile data volumes rising by a compound annual growth rate of around 50 per cent between 2012 and 2018. “We have seen of late strong and sustainable interest from institutional funds that are also keen for us to transfer to the Main Board of Bursa Malaysia,” said Kung. “The company’s high margin earnings, accountable and ‘high achiever’ corporate culture, robust growth and established leadership position with proven industry capability are key contributory factors for such strong interest.” Instacom continues to be one of Bursa Malaysia’s more actively traded counters in recent weeks — consistently a top 30 traded stock for several weeks in a row, culminating in it being the top traded counter on Bursa Malaysia with volume of 57.5 million shares traded last Friday. “We are pleased with the consistently strong following of Instacom shares as it shows that our shares have ample liquidity and high trade velocity with strong follow-through buying,” said Kung. “We now have more than 6,800 shareholders with some institutional investors among them.” RHB Research in its book Top Malaysia Small Cap Companies – 30 Jewels (2013 edition) released for institutional investors, makes a “buy call” on Instacom with fair value of 46 sen based on a P/E multiple of 13x on FY14F earnings. On the basis of RHB’s Forward FY13 PER (x), Instacom ranks #8. On Forward FY13 P/BV (x), it ranks #9; Highest 3-Year CAGR (FY09-FY13) ( per cent) #1; and Lowest PEG (x) #1. “All in all, we like the company for i) its strong growth prospects within the telecommunications space, ii) its pool of recurring earnings, which provide earnings certainty, and iii) its attractive valuations based on the stock’s current price,” states RHB Research, which is recommending Instacom as a “Top 5 Jewel” on Bursa Malaysia. Instacom today provides a comprehensive set of services to all of Malaysia’s telecommunications giants including network planning, design and optimisation, network deployment together with infrastructure management and maintenance. The company has come a long way since its beginnings a decade ago. Malaysia Debt Ventures (MDV), wholly owned by the Ministry of Finance, has been a supporter of Instacom and its various projects throughout Malaysia. MDV had Instacom on the wrap-around cover of BusinessWeek for the January 6 and 16, 2006, editions, which stated then that “the company’s rise, however, wouldn’t have been as meteoric without a finance partner who truly understand their needs. A finance partner like Malaysia Debt Ventures, or MDV in short”. — Bernama dlvr.it/3x6VjW
Posted on: Mon, 09 Sep 2013 10:40:47 +0000
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