Posted by alex_theking > 2013-10-31 14:42 | Report Abuse

Redtone - Earnings Stabilising, Awaits Catalyst
Date: 31/10/2013

Source : KENANGA
Stock : REDTONE Price Target : 0.81 | Price Call : BUY
Last Price : 0.735 | Upside/Downside : +0.075 (10.20%)

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Period 1Q14

Actual vs. Expectations REDTONE’s 1Q14 NP of RM3.65m (+82% YoY) came in within our expectation and accounted for 13.6% of our full-year estimate. We understand that the group will recognize more earnings from its RM82.5m government project in the remaining quarters. Coupled with better economies of scale which should benefit margin, this should bring its full-year NP close to our estimate of RM26.8m.

Dividends No dividend was declared during the quarter as expected.

Key Result Highlights YoY, REDTONE’s 1Q14 revenue jumped by 18% to RM36.1m, mainly driven by the strong contribution from its data segment (+97% to RM22.4m) that was led by its RM82.5m government project as well as higher data and application revenue contribution. Based on our estimate, the group has recognized about 40% of its government project in 1Q14 (FY13:~20%). The group’s PBT, meanwhile, soared 147% to RM4.7m, thanks to the cost synergies created post divestment of non-core and lossmaking businesses as well as from the higher data revenue. The strong growth rate, however, was partially offset by a tax deduction (instead of tax refund in the previous financial year) thus bringing its NP to advance by 82% to RM3.6m.

QoQ, the turnover lower by 17% as a result of the lower data segment revenue mainly due to a high-base effect arising from the one-off spectrum sharing fee from Maxis recorded in the previous preceding quarter. The group’s EBIT was also lower by 78% to RM4.7m as a result of lower-margin data project recognition.

The group’s cash & bank balances continued to grow and stood at RM38.8m while its total borrowing stood at RM8.1m in 1Q14, implying a net cash per share of 6.2 sen. Its reserve, meanwhile, increased to RM66.6m from end-FY13 of RM59.3m.

Outlook REDTONE’s short-to-mid term catalysts rely mainly on its RM82.5m government project as well as the synergistic benefits that could be created under the NSA agreement with Maxis.

Meanwhile, any successful conclusion of its recent projects biddings (i.e. DTTB project) would be the next key catalysts. Should its 49%-stake owned REDTONE Network S/B managed to secure the project, we believe there is a likelihood for the latter to seek for public funding in the near-term and unlock REDTONE’s shareholder value.

Change to Forecasts No change in our FY14-FY15 earnings forecast.

Rating Maintained OUTPERFORM

Valuation We are maintaining our target price at RM0.81 based on unchanged FY14 targeted PER of 14.5x (+0.5SD)

Risks to Our Call Dependency on a sole major partner – Maxis.

Failure to secure more government contracts.

Posted by qwer1234 > 2013-10-31 14:42 | Report Abuse

Thanks for your explaination Shan

Posted by alex_theking > 2013-10-31 14:51 | Report Abuse

redtone boleh....

later u c redtone wa 0.59...

Posted by alex_theking > 2013-10-31 15:00 | Report Abuse

better play wa bcos the different 0.25
went mother 0.73- 0.25=0.48 redtone wa price
wen u buy wa 0.475, 10000 units =rm 4750
if u buy mother 0.73,10000 units =rm 7300
but 1 sen up for both share u rec rm100

Posted by ladzatz > 2013-10-31 16:41 | Report Abuse

why stagnant?

Posted by sheep > 2013-10-31 16:51 | Report Abuse

tomoRrow T+3. sell on strength, buy on low...0.45?

Posted by air01557 > 2013-10-31 18:27 | Report Abuse

told u guys to sell in the morning - now I will re-enter on Monday !! ha ha

Posted by vbeh > 2013-10-31 18:47 | Report Abuse

accumulate..................

Posted by henrytham77 > 2013-11-01 00:32 | Report Abuse

WA GOOD SUPPORTING AT 0.47, RESISTANCE 0.53

Posted by TESSA > 2013-11-01 12:11 | Report Abuse

red..red :(

Posted by Moon Ng > 2013-11-01 12:15 | Report Abuse

tessa, u bought redtone too :( what price u went in? mine in loss now...

Posted by TESSA > 2013-11-01 12:16 | Report Abuse

same la here **sigh**

Posted by Moon Ng > 2013-11-01 12:17 | Report Abuse

i bought wa, u bought mother? wat's your plan? hold or sell? :(

Posted by kenlfo > 2013-11-01 13:30 | Report Abuse

just hold it...

Posted by dfsbipohsch > 2013-11-01 13:38 | Report Abuse

Any good news to go in

Posted by air01557 > 2013-11-01 13:43 | Report Abuse

yes ----- good news is that on Monday cheap sale - buy then !!

Posted by 3689 > 2013-11-01 14:45 | Report Abuse

Tessa redtone also u holding? :)

Posted by fabregas88 > 2013-11-01 14:50 | Report Abuse

rebound soon

Posted by air01557 > 2013-11-01 16:28 | Report Abuse

ha ha ha - cheap sale on MONDAY - then all can re-enter

Posted by kenlfo > 2013-11-01 16:41 | Report Abuse

air01557, how much is your TP to re-enter on monday?

Posted by airO1557 > 2013-11-01 17:29 | Report Abuse

0.65 best buy...

Posted by Alex Leow Sze Shen > 2013-11-01 22:50 | Report Abuse

SOld my redtone-wa at 0.49 that day, clean sweep! :)

Posted by JimYeoh > 2013-11-02 00:07 | Report Abuse

Will DTTB go to digistar?

Posted by daz3no > 2013-11-02 03:27 | Report Abuse

digistar involvement as stated....

http://www.theedgemalaysia.com/in-the-edge-financial-daily-today/256272-digistar-to-bid-for-dttb-sub-contracts.html

Posted by TESSA > 2013-11-02 19:29 | Report Abuse

3689 i have,
jalan duduk, jalan duduk,
then jatuh..jatuh..PHEW

Posted by vbeh > 2013-11-04 09:46 | Report Abuse

waiting cheap sale to buy....

Posted by TESSA > 2013-11-04 09:47 | Report Abuse

:(

Posted by fabregas88 > 2013-11-04 09:57 | Report Abuse

damn...

Posted by vbeh > 2013-11-04 11:42 | Report Abuse

now is the right time to buy.........

Posted by setia2u > 2013-11-04 16:17 | Report Abuse

Sudden turn of the price from negative to positive at 3.30pm, with big volumes, interesting .... Someone knows something ??????

Posted by Kelvin Leong > 2013-11-04 16:38 | Report Abuse

and now turning red Again

Posted by Windrunner > 2013-11-04 16:57 | Report Abuse

and lastly turning green.. hahaha... this counter is interesting

Posted by fabregas88 > 2013-11-04 17:03 | Report Abuse

cheers

Posted by fabregas88 > 2013-11-04 17:04 | Report Abuse

hi guys, this counter can keep long?

Posted by daz3no > 2013-11-04 17:04 | Report Abuse

lol! whoever bought at lower price today sit tight, may see price move higher after the holiday. noticed volume also increase.

Posted by fabregas88 > 2013-11-04 17:09 | Report Abuse

daz3no, u feel this share will boom?

Posted by bigturtle2010 > 2013-11-04 17:16 | Report Abuse

i bought the redtone-WA at 0.485, it is really catching my nerves~

Posted by Kelvin Leong > 2013-11-04 17:22 | Report Abuse

LOL, wad is happening?

Posted by daz3no > 2013-11-04 18:08 | Report Abuse

yes be patient guys, redtone got good biz model. without the dttb tender it is already turning around from losses to profitability. in the near term need to break 0.745 for prices to move higher. in the mid term tp 0.81 then 0.86.

read the chairman's statement in the audited account.
http://klse.i3investor.com/servlets/anpth/948554.jsp

happy investing :)

Posted by air01557 > 2013-11-05 10:09 | Report Abuse

yesss told u guys to wait till Monday to buy cheap, remember. I bought WA at 45sen and will sell on Friday or next Monday.

Posted by vbeh > 2013-11-06 11:12 | Report Abuse

time to buy again....

Posted by yanxuan8 > 2013-11-06 21:22 | Report Abuse

Yes, that's right, time to buy again. I am back to this counter after selling in early October (cheated by uncle Sam on their shutdown and debt issues) and taking one month break from holding this stock, bought 100k at 73.0 sen this afternoon, betting on DTTB project.

Posted by alex_theking > 2013-11-07 08:17 | Report Abuse

hi yanxuan,

good time to play tis counter but their wa price is cheep to invest..
right now 0.47,it can go until 0.59..
if redtone wa 0.59 mother will be 0.59 +0.25=0.84

i give current example 0.47+0.25=0.72... but right now mother 0.73-0.25=0.48
right now redtone bellow market price.


Good time to attack their wa...

Posted by GRACESIEW > 2013-11-07 12:11 | Report Abuse

so the good time to buy is on redtone wa ?

Posted by alex_theking > 2013-11-07 12:30 | Report Abuse

yes...
once dttb in....

Posted by GRACESIEW > 2013-11-07 12:58 | Report Abuse

wat is the good price to buy for redtone wa

Posted by alex_theking > 2013-11-07 14:17 | Report Abuse

if u can get in 0.44 very..very..good
now also very good timing buy in 0.465 or 0.47..

Posted by alex_theking > 2013-11-07 14:18 | Report Abuse

later u c their profit...

Posted by alex_theking > 2013-11-07 14:23 | Report Abuse

don't pump in all u money in tis counter
don't play wit contra money...
later u buy in any price ...don't sell in small profit like 0.05c,1,2,3c...
atleast profit 4-5sen...

Posted by alex_theking > 2013-11-07 14:44 | Report Abuse

very important don't sell wen small lost...