Monday, July 29, 2013

Why I Like Instacom

Readers of this blog would be familiar with my liking for Instacom. Instacom Group Berhad, a company which is principally providing support services to the telco industry and recently made its debut on the Ace Market of Bursa Malaysia (via the RTO of I-Power Berhad) in October 2012 may well be on its way to a possible Main Market transfer. The company acts as a contractor to install equipment for network equipment providers for the telcos. In addition to the aforesaid bread and butter business, it differentiates its business model with the other tier one boys mainly via its build and lease tower segment. In the longer run, upon having sufficient number of towers with recurrent income, the group may consider putting this segment of assets into a REIT – again a very common feature in overseas markets.

Following the recent announcement of the free 1 for 2 warrants, that exercise should be nearing approval and completion to go ex soon. Today is also an interesting day with RHB launching its 30 Jewels for smaller caps.

Their Top 5 picks include Tambun, Brahims, Instakom, Well Call and Cahaya Mata Sarawak.

Furthermore, the implementation of the LTE network means more towers will be built, especially for the new players which were recently awarded the spectrum. This only means there are more jobs in the pipeline for players like Instacom, which will enhance its future earnings.

On 20 May 2013, Instacom announces that the company had received and accepted a Letter of Award for the supply, installation, testing and commissioning of telecommunication network and infrastructure and engineering works in Sarawak. The value of this project to Instacom is RM205 million, which is 
expected to contribute strongly to the company’s earnings and net assets for financial years ending 2013 to 2015. 

This development follows on the heels of the company’s sterling Q1 results announced on 14 May 2013 when it posted revenue of RM30.210 million and profit before tax of RM6.828 million, marking significant respective increases of RM29.350 million and RM9.895 million against the previous corresponding period.

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.