Neratel

[NTL]

If the Myanmar Dream comes true, is Nera able to eat the pie? With it's existing work in hand, how much more can it takes? Will they need to borrow and end up with a net debt? I have been thinking about this, and unable to find an answer. Any help?

[GreedandFear]

If the Myanmar Dream comes true, is Nera able to eat the pie? With it's existing work in hand, how much more can it takes? Will they need to borrow and end up with a net debt? I have been thinking about this, and unable to find an answer. Any help?

When I asked the CEO, at the AGM, what this biggest challenge was, he highlighted the hiring, retention and training of engineers so I think execution of a big contract is a concern. On the positive side, the CEO did also emphasize that the company does move its engineers around from country to country depending upon the volume of business. I am not concerned about Neratel having to raise more debt unless it is for acquisitions. The main cost is labour, so the key question is whether they have enough engineers or can hire and train them quickly.....assuming, of course, that they do end up winning these Myanmar contracts :-)

[NTL]

If the Myanmar Dream comes true, is Nera able to eat the pie? With it's existing work in hand, how much more can it takes? Will they need to borrow and end up with a net debt? I have been thinking about this, and unable to find an answer. Any help?

When I asked the CEO, at the AGM, what this biggest challenge was, he highlighted the hiring, retention and training of engineers so I think execution of a big contract is a concern. On the positive side, the CEO did also emphasize that the company does move its engineers around from country to country depending upon the volume of business. I am not concerned about Neratel having to raise more debt unless it is for acquisitions. The main cost is labour, so the key question is whether they have enough engineers or can hire and train them quickly.....assuming, of course, that they do end up winning these Myanmar contracts :-)

Hi GreedandFear,

Thanks for your reply. Manpower is surely one major issue. Another will be execution. They are moving into a foreign country where they have no office at all. How long will they take to establish themselves there and start doing actual work? What will be the hiccups? What will be the restrictions imposed by the Myanmar Government? I don't think it will be easy.

Let's see how.

[KopiKat]

If the Myanmar Dream comes true, is Nera able to eat the pie? With it's existing work in hand, how much more can it takes? Will they need to borrow and end up with a net debt? I have been thinking about this, and unable to find an answer. Any help?

When I asked the CEO, at the AGM, what this biggest challenge was, he highlighted the hiring, retention and training of engineers so I think execution of a big contract is a concern. On the positive side, the CEO did also emphasize that the company does move its engineers around from country to country depending upon the volume of business. I am not concerned about Neratel having to raise more debt unless it is for acquisitions. The main cost is labour, so the key question is whether they have enough engineers or can hire and train them quickly.....assuming, of course, that they do end up winning these Myanmar contracts :-)

Hi GreedandFear,

Thanks for your reply. Manpower is surely one major issue. Another will be execution. They are moving into a foreign country where they have no office at all. How long will they take to establish themselves there and start doing actual work? What will be the hiccups? What will be the restrictions imposed by the Myanmar Government? I don't think it will be easy.

Let's see how.

The Lim & Tan report I posted on the last page mentioned that Neratel is now deploying in Myanmar for the Banks, I guess must be for their other Data systems. So, ought to have familiarity with working in Myanmar.

The time frame looks tight. I wonder if the 2 winners will have the luxury of time to even call a tender... Perhaps even now, they must be working round the clock to see who can help to provide the solutions and manpower resources within the time frame.

[NTL]

If the Myanmar Dream comes true, is Nera able to eat the pie? With it's existing work in hand, how much more can it takes? Will they need to borrow and end up with a net debt? I have been thinking about this, and unable to find an answer. Any help?

When I asked the CEO, at the AGM, what this biggest challenge was, he highlighted the hiring, retention and training of engineers so I think execution of a big contract is a concern. On the positive side, the CEO did also emphasize that the company does move its engineers around from country to country depending upon the volume of business. I am not concerned about Neratel having to raise more debt unless it is for acquisitions. The main cost is labour, so the key question is whether they have enough engineers or can hire and train them quickly.....assuming, of course, that they do end up winning these Myanmar contracts :-)

Hi GreedandFear,

Thanks for your reply. Manpower is surely one major issue. Another will be execution. They are moving into a foreign country where they have no office at all. How long will they take to establish themselves there and start doing actual work? What will be the hiccups? What will be the restrictions imposed by the Myanmar Government? I don't think it will be easy.

Let's see how.

The Lim & Tan report I posted on the last page mentioned that Neratel is now deploying in Myanmar for the Banks, I guess must be for their other Data systems. So, ought to have familiarity with working in Myanmar.

The time frame looks tight. I wonder if the 2 winners will have the luxury of time to even call a tender... Perhaps even now, they must be working round the clock to see who can help to provide the solutions and manpower resources within the time frame.

Hi KopiKat,

Thanks for pointing out. Went googled a little more. This was first reported by OSK in Feb, and was mentioned again in their Q1 announcement. This should be just a small contract as there was no formal announcement. Hope that the experience is sufficient for them to take a big pie.

[ValueBeliever]

have you been to Myanmar or have burmese friend?

Let me tell you, it is impossible to get connected when you're in Burma with your friends.

No network, no business and I have no doubts the telecom operators will need to rope in Nera in a big way. This is the best time for NERA to make the most out of it. They will need to quickly set up operation in Burma, hire quickly and CEO got to quickly organize project team.

The Telco need to see such action before they award. 1st mover advantage counts!

[BlueKelah]

Singtel and Yoma failed to get into the Myanmar market.

Neratel is just a small supplier of specialty tech compared to singtel, why does everyone seem to think NEratel is gonna be going into myanmar as a major telco and be responsible for setting up core infrastructure there?

I would think at most it can supply the telcos setting up there with new equipment IF it wins any contracts.

If it can win this contract then bottomline may grow somewhat but has anyone calculated the "potential" increase in revenue?

It seems like expectations are with Myanmar it can become a "growth" stock rather than a "dividend" stock it used to be.

[KopiKat]

Singtel and Yoma failed to get into the Myanmar market.

Neratel is just a small supplier of specialty tech compared to singtel, why does everyone seem to think NEratel is gonna be going into myanmar as a major telco and be responsible for setting up core infrastructure there?

I would think at most it can supply the telcos setting up there with new equipment IF it wins any contracts.

If it can win this contract then bottomline may grow somewhat but has anyone calculated the "potential" increase in revenue?

It seems like expectations are with Myanmar it can become a "growth" stock rather than a "dividend" stock it used to be.

I think 'Wildreamz' summarised it best,

Too early to say, if the Myanmar thing comes through, it could be big.

All in all a solid company, with strong balance sheet and good growth prospect (its MENA expansion), with or without the Myanmar deal.

At current $0.76, I wouldn't say it is cheap but I don't see it as over-valued either. Using FY12 results, PE = 14.18 ; Yield = 5.26% ; Negligible Debts ; Cash = 11.58ct per share (Q113).

IMO, Profitable, Healthy Balance Sheet. Altho' Growth from MENA appears to have stuttered (we were expecting that "growth" for 1-year anyway, as it was a newly acquired territory), the acquisition of Nera Malaysia will likely provide a 10% recurring "growth" (fm an earlier Lim & Tan report - we'll get a better picture from the coming Q2 results as it'd include ~1mth of this. For FY12, their 30% stake in Nera Malaysia accounted for 5.74% of total Revenue). Further, new majority shareholder may have new growth ideas, especially for Indonesia mkt where he's based. Any Myanmar biz would be a bonus and if prices do get too forward, I'll definitely sell. But, at current prices? Perhaps some short term trades if time and price volatility permits....

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Actually my concern is, what if Neratel starts to issue rights/placment or starts to borrow money...they just hire a new CFO whom imo is an expert in this area!

Your fears may be very real when taken together with the extracts from an earlier post by 'GreedandFear' who'd kindly summarised the AGM proceedings. Extracts,

Given that one resolution was to allow the company to issue debt and shares and the point about fragmented competition, my view is that North Star's strategy will be to use Neratel to act as a consolidator within the industry through acquisitions as well as entering into new areas. The analogy used was Datacraft which grew into a $1.2b market cap company by the time it was sold.

I think North Star will push for major changes.

Let's hope and pray they don't do it too aggressively.....

[felixleong]

yeah at pe 14 and yield 5%, seems fairly priced already

[NTL]

Is this a great business at a fair price?