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See important disclosures at the end of this report Powered by EFATM
Platform 1
Initiating Coverage, 24 August 2015
Global Invacom Group (RAD SP) Buy Technology - Technology Target Price: SGD0.45
Market Cap: USD39.9m Price: SGD0.22
Hitting Rock Bottom But Turnaround In FY16
Macro
2.00
Risks
1.00
Growth
2.00
Value
3.00
55
63
72
80
88
97
105
0.19
0.24
0.29
0.34
0.39
0.44
0.49
Global Invacom Group (RAD SP)Price Close Relative to Straits Times Index (RHS)
5
10
15
20
25
Au
g-1
4
Oct-
14
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
Vo
l m
Source: Bloomberg
Avg Turnover (SGD/USD) 0.60m/0.44m
Cons. Upside (%) n/a
Upside (%) 105
46-wk Price low/high (SGD) 0.22 - 0.45
Free float (%) 56
Share outstanding (m) 254
Shareholders (%)
Neo Chee Beng 7.2
Investec Asset management 5.9
River & Mercantile funds 5.6
Serial System 4.5
Share Performance (%)
YTD 1m 3m 6m 12m
Absolute (46.4) (35.3) (33.3) (49.4) (46.7)
Relative (34.7) (23.4) (19.7) (35.9) (42.1)
Shariah compliant
Jarick Seet +65 6232 3891
Forecasts and Valuations Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F
Total turnover (USDm) 116 134 159 186 219
Reported net profit (USDm) 8.0 5.1 1.7 8.3 10.8
Recurring net profit (USDm) 8.0 5.1 1.7 8.3 10.8
Recurring net profit growth (%) na (36.5) (66.5) 388.3 29.8
Recurring EPS (USD) 0.03 0.02 0.01 0.03 0.04
DPS (USD) 0.00 0.00 0.00 0.01 0.01
Recurring P/E (x) 4.5 8.3 23.4 4.8 3.7
P/B (x) 0.81 0.70 0.65 0.59 0.53
P/CF (x) 4.74 5.40 na 1.85 4.56
Dividend Yield (%) 0.0 2.2 0.0 6.3 8.1
EV/EBITDA (x) 2.04 2.77 7.51 0.81 0.40
Return on average equity (%) 19.9 9.7 2.8 12.9 15.2
Net debt to equity (%) net cash net cash net cash net cash net cash
Our vs consensus EPS (adjusted) (%) 0.0 0.0 0.0
Source: Company data, RHB
We initiate coverage on Global Invacom (GInva), a manufacturer cum supplier of satellite TV and cable peripherals products with a SGD0.45 TP (implying a FY16F P/E of 9.8x), representing 105% upside potential return and recommend BUY. We like Ginva as it operates in a sector with high barriers to entry and also it owns the patents to its products. We think the current price level and EPS hit rock-bottom and expect a strong turnaround in FY16, due to at least 1) demand surge from new satellite launches 2) potential Skyware turnaround 3) cross-selling of products and 4) a new generation product. Strong turnaround ahead. The performance in FY15 may be dragged
down by a delay in sales to its major customers, due to a change in procurement procedures as well as a few one-off costs such as the acquisition of Skyware Global (Skyware) which is currently in a loss making position. However, with its i) expected increase in demand due to major customer launching two new satellites in FY16, coupled with the fact that ii) Skyware is close to breaking even and should be profitable by FY16, as well as iii) being able to supply both dishes and LNBs to its largest customer and iv) new generation product, we expect GInva to outperform with an approximately 7x NPAT surge in FY16.
Share buy-backs to continue. The company has been aggressively
buying back its shares since FY13, partially due to its strategy of using its treasury shares to fund its M&A activities. As of 2015, the company has already bought over 26.6m shares at an average price of SGD0.36/share, ie much higher than the existing level. Going forward, the management highlighted that share buybacks will likely continue, especially if they have an acquisition target. Management also owns employee share options which have an exercise price of SGD0.31.
Serial System as a strategic partner. In June this year, Serial System
(SERL SP, NR), a proven distributor with over USD1bn of revenues in FY14, took a 4.5% stake in GInva at SGD0.29/share. Serial System will be involved in helping GInva improve procurement of components in tandem with their growth strategy, which could result in cost savings.
Initiate with BUY and SGD0.45 TP. With several positive catalysts, we
expect a strong turnaround in FY16.
Key Risks: customer concentration risk (GInva derived 86% of FY14
revenues from its top 5 customers); further risks on page 8.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 2
Table Of Contents Table Of Contents ....................................................................................................... 2
Investment Merits ........................................................................................................ 3
Valuation ..................................................................................................................... 6
Key Risks .................................................................................................................... 8
Financial Forecasts ................................................................................................... 14
Company Background............................................................................................... 17
Business Analysis ..................................................................................................... 20
Financial Exhibits ...................................................................................................... 22
SWOT Analysis ......................................................................................................... 24
Recommendation Chart ............................................................................................ 25
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 3
Investment Merits
Increase in demand from new satellites to be launched by major customers in 2H16. Hughes, a wholly owned subsidiary of EchoStar (SATS US, NR) which is a
major customer of GInva, confirmed plans to launch a new satellite called the EchoStar 19/Jupiter 2 K-a-band broadband satellite. It is designed to relieve demand pressure on EchoStar‟s Hughes consumer satellite broadband service and is expected to be launched in 2H16. Hughes, also an existing customer of GInva is currently relying on the EchoStar 17/Jupiter 1 satellite in orbit which is running out of capacity. The new multi-spot beam K-a-band satellite will help to meet the growing demand for HughesNet Gen4 high-speed satellite Internet service in North America, with a 50% more capacity. EchoStar is also planning to launch another satellite called EchoStar 23 over Brazil that the company had won at an auction but has been yet unable to commercialize for direct-to-home television due to a lack of finding a Brazilian partner. EchoStar is proceeding with the construction of the satellite, with a planned launch in late 2016. With new satellite launches planned in 2016, GInva‟s major customers will be able to expand their capacities which are a catalyst as more subscribers would translate to more dishes and LNBs ordered from GInva.
Figure 1: EchoStar 19/Jupiter 2 K-a-band broadband satellite
Source: spacenews.com
Turnaround in 2H15 – expected an explosive growth in FY16. In 1H15, GInva
was impacted by a delay in sales to major customers located in the US, UK and countries in Asia, due to a change in their procurement procedures. However, these orders have restarted in July 2015 and may contribute to GInva‟s 2H15 performance, signaling a strong turnaround in 2H15. However, the acquisition of Skyware which is currently in a net loss position will probably drag down its FY15 NPAT. We understand that Skyware is close to breaking even; also Skyware has seen orders surge from its major customers due to a replacement cycle looming ahead and the switch to a few new generation products expected to happen in FY16. We expect Skyware to contribute positively to GInva‟s earnings from FY16 onwards.
New generation product leading replacement cycle. We learned that GInva has
been involved in R&D and manufacturing for a new generation product which is in the final stage of qualification by its customers. This would lead to a replacement cycle, especially for its major customers, which could result in a growth in demand for GInva‟s products for the next 2 to 3 years.
Able to supply largest customer with satellite dishes. Previously, GInva was
mainly supplying LNBs to its single largest customer, Echostar. With the acquisition of Skyware, GInva can now supply dishes as well, which could result in an increased revenue stream.
Adding a US manufacturing presence. With the acquisition of Skyware, GInva will
have a satellite communications production presence in the US coupled with its existing production footprint in Asia and Europe. This will allow GInva to target countries in South America which have a huge reliance on satellite for calls, TV and high speed internet.
The only global full-service outdoor unit supplier. According to the management,
after the acquisition of Skyware, GInva will be the world‟s only full-service outdoor unit supplier, providing an extensive portfolio of products from antennas and
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 4
electronics to accessories; GInva can also provide both LNBs and Dishes and meet the full spectrum of the customer‟s needs.
High barriers to entry. Entering the dish business requires a lot of time, investments
and R&D efforts. It took GInva 3 years, coupled with tens of millions in investments to design a dish when it entered this segment back in 2010. In addition, a new competitor would have to go through a stringent scrutiny by broadcasters which usually takes about 1-2 years, before it could receive a substantial order. An existing dish maker such as Skyware can redesign a dish in just 3 to 6 months.
Stickiness of customers. GInva‟s customers consist mainly of network and satellite
operators and operate normally in more rural areas. Therefore, the quality of the dishes as well as the LNBs has to be good and last for a long period of time. It could be costly and a hassle for the TV network to constantly send its repair staff to their customer‟s homes, especially in a large country. As a result, customers tend to stick to their manufacturers and suppliers if these deliver on time and provide quality products.
Product range expanded - able to supply both Ka and Ku band VSAT technologies. Previously, GInva was only supplying mainly Ku-band VSAT
technologies to its customers. However, with the acquisition of Skyware, GInva now added Skyware‟s VSAT technology for the Ka-band into its portfolio of products and can now supply Ka-band related dishes and LNBs to its customers, especially in the US and Asia.
Evolution Cycle - Transition from Ku to Ka, especially in Asia. In the past few
years, there has been a growing amount of Ka-band capacity launched in many regions of the world, fueled by the growth in Internet-based applications and other wireline and wireless communications technologies. The lower Ku-band frequency capacity has filled up in most of the geosynchronous orbital slots. As a result, the growing demand for satellite bandwidth is driving investment in Ka-band as the next choice for launching new satellite capacity. In Asia, typically a Ku-band is being used at the moment and there will be a evolution cycle soon when they shift towards Ka-band which will provide higher quality, better performance and faster speed services.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 5
Share buy-backs likely to continue. The company has been aggressively buying
back its shares since FY13, partially due to its strategy of using its treasury shares to fund its M&A activities. As of 2015, GInva has already bought over 26.6m shares at an average price of SGD0.36/share. Going forward, the management highlighted that share buybacks will likely continue as they are also optimistic on a strong turnaround and believe that their company is deeply undervalued. Management also owns some employee share options which have an exercise price of SGD0.31.
Figure 2: Share Buy Back
Date Number of
shares
Price
(SGD)
Total Total Consideraton (SGD)
16/10/2013 800,000 0.197 157,600 158,101.68
17/10/2013 800,000 0.198 158,400 158,904.23
18/10/2013 1,000,000 0.197 196,954 197,580.98
21/10/2013 1,400,000 0.197 275,778 276,655.47
22/10/2013 620,000 0.199 123,410 123,802.61
23/10/2013 400,000 0.205 82,000 82,392.64
24/10/2013 410,000 0.205 84,100 84,502.72
28/10/2013 570,000 0.204 116,508 116,878.87
Total Share Buy Back for Year 2013 6,000,000 0.20 1,198,819
2/9/2014 620,000 0.445 275,900 276,756.12
3/9/2014 700,000 0.443 309,810 310,961.83
4/9/2014 610,000 0.440 268,400 269,232.85
5/9/2014 700,000 0.440 308,000 308,955.73
8/9/2014 700,000 0.440 308,000 308,955.73
9/9/2014 243,000 0.440 106,920 107,251.76
10/9/2014 260,000 0.440 114,400 114,754.98
15/9/2014 354,000 0.439 155,490 155,972.39
8/10/2014 800,000 0.395 316,000 316,980.55
9/10/2014 794,000 0.394 313,170 314,142.05
13/10/2014 800,000 0.405 324,000 325,005.37
14/10/2014 792,000 0.395 312,770 313,740.84
Total Share Buy Back for Year 2014 7,373,000 0.42 3,122,710
9/1/2015 1,000,000 0.395 394,900 396,125.37
12/1/2015 1,000,000 0.390 390,000 391,210.17
13/1/2015 1,000,000 0.390 390,000 391,210.17
14/1/2015 960,000 0.385 369,600 370,746.87
15/1/2015 1,000,000 0.390 390,000 391,210.17
16/1/2015 1,000,000 0.395 395,000 396,225.69
19/1/2015 650,000 0.385 250,250 251,026.52
21/1/2015 2,000,000 0.389 778,000 780,414.14
22/1/2015 2,000,000 0.395 790,000 792,451.37
23/1/2015 1,000,000 0.400 400,000 401,241.20
3/6/2015 2,000,000 0.338 675,680 677,776.63
5/6/2015 1,004,900 0.315 316,544 317,525.73
22/6/2015 12,000,000 0.341 4,091,496 4,104,195.93
Total Share Buy Back for Year 2015 26,614,900 0.36 9,661,360
Grand Total Share Buy Back for Years 2013-2015 39,987,900 0.35 13,982,889
Source: RHB estimates
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 6
Valuation
Initiating coverage with a BUY and a SGD TP0.45.
We initiate coverage on GInva with a BUY and a TP of SGD0.45, based on a 9.8x FY16F P/E.
We forecast recurring net profit after tax (NPAT) to grow at a c.25% CAGR to SGD8.3m in FY16F from SGD5.1m in FY14. Its global listed peers are trading at an average of 19.6x FY15F P/E (Figure 3). Due to the relatively smaller scale of the company when compared with its global peers, lower liquidity of the company as well as potential lumpy earnings recognition, we ascribed a 50% discount to its peer average to arrive at our 9.8x FY16F P/E. Our TP of SGD0.45 represents a potential upside of c.105% from its current trading price. Our TP is also backed by a conservative DCF-backed valuation of SGD0.46 (Figure 4)
Figure 3: Peer Comparison
Name TickerMkt Cap
(SGDm)FY15F P/E (x) FY15F P/B (x) Net Gearing (%)
FY15F Dividend
Yield (%)ROE (%)
Global Invacom Group Ltd* RAD SP Equity 79 58.0 0.9 -34.2 1.8 9.7
CalAmp Corp CAMP US Equity 864 30.0 4.6 -28.8 N/A 19.3
Wistron NeWeb Corp 6285 TT Equity 1135 13.6 2.2 -30.5 5.3 17.3
Zinwell Corp 2485 TT Equity 480 11.9 1.4 -49.0 N/A N/A
Prime Electronics Satellitics Inc 6152 TT Equity 69 23.0 0.5 3.6 N/A N/A
Average excluding Global Invacom 19.6 2.2 -26.2 5.3 18.3 Source: RHB estimates*, Bloomberg
A strong boost in FY16F. With new satellites to be launched in FY16, coupled with
the potential strong turnaround in its latest acquisition (Skyware) and the likely cross-selling of Skyware‟s technologies to its existing customers, especially on providing dishes to its existing single largest customer in the U.S, we expect earnings to bounce back substantially in FY16F.
Strong balance sheet affirms stability and allows potential further M&A growth.
As GInva is in a strong net cash position, it will probably continue to look for private M&A targets that complement its business model. In addition, its M&A targets could also enable access to new technology, markets, customers and businesses. However, management highlighted that they will first digest its latest acquisition before making another one of similar nature.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 7
Corroborated by a DCF-derived TP of SGD0.46 TP
DCF-derived TP of SGD0.46 with a 12% WACC. We back our 9.8x FY16 P/E TP of
SGD0.45 with a DCF-based SGD0.46 TP. The assumptions are listed below:
i. We apply a risk-free rate of 2.5% from the 10-year average yield of the 10-year Singapore Government bonds
ii. Expected market return is 10%, based on Bloomberg‟s 10‐year average
return of the Singapore market
iii. Beta of 1.0
iv. We assume a terminal growth rate (TG) of 0%
Figure 4: GInva’s DCF Valuation
USD(m) Total (USDm) FY15F FY16F FY17F FY18F FY19F Terminal Value
EBIT 1.8 9.0 11.7 12.0 13.1
EBIT(1-T) 1.7 8.3 10.8 11.1 12.2
Less: Capex (2.0) (5.0) (2.0) (2.0) (2.0)
Add: Depreciation & Amortisation 1.6 2.1 2.1 2.1 2.1
Less: Change in Non-cash WC (5.7) 11.1 (4.2) (2.3) (2.6)
FCFF (4.4) 16.6 6.7 8.9 9.6 80.0
Present value of FCFF (3.9) 13.2 4.8 5.6 5.4 45.4
Total FCFF 71
Add : Cash (with IPO proceeds) 14
Less: Value of Debt 0
Target Equity Value 84
No.of shares 254.4
USD/SGD 1.4
Intrinsic Share Price (SGD) 0.46 Source: RHB estimates
Scenario Analysis Base-case scenario: we assume a 20% growth rate for satellite communications
and a 5% growth rate for contract manufacturing in FY16. In addition, we also expect gross margins to recover back to 25% and 10% for both Satellite communications and Contract manufacturing respectively.
Worst case we assume a 0% growth rate for satellite communications and a 0%
growth rate for contract manufacturing in FY16. In addition, we also expect gross margins to recover maintain at 22% and 10% for both Satellite communications and Contract manufacturing respectively.
Best case, we assume a 30% growth rate for satellite communications and a 10%
growth rate for contract manufacturing in FY16. In addition, we also expect gross margins to recover maintain at 27% and 10% for both Satellite communications and Contract manufacturing respectively.
Figure 5: Scenario Analysis
Worst Case Base Case Best Case
Satellite Communications growth rate (%) 0 20 30
Contract Manufacturing growth rate (%) 0 10 10
Satellite Communications gross margins (%) 22 25 27
Contract Manufacturing gross margins (%) 10 10 10
Net Profit (USDm) 2.8 8.3 13.3
FY16 P/E (x) 14.2 4.8 3
Target Price (SGD) 0.15 0.45 0.72 Source: RHB estimates
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 8
Key Risks Customer concentration risk. GInva derived 85.7% of FY14 revenue from its top 5
customers. In particular, 46% of FY14 revenue came from its major customer Echostar. A change in business strategy that reduces Echostar‟s reliance on GInva, or a rise/drop in the financial performance by other major customers would likely have a noticeable impact on GInva‟s revenue.
Currency risk. While GInva revenue is reported in USD, only half of the material
costs are in USD terms, as the remainder is in local currency. As the company conducts activities around the world (Figure 6), it has exposure to MYR, SGD and GBP. Therefore, the recent weakening of the MYR against the USD would have reduced revenues and raised the costs of the manufacturing activities in Malaysia. Conversely, a weaker USD would have a positive impact on the company‟s activities outside the US.
Figure 6: Global Invacom’s global activities
Source: RHB, Company data
Weak adoption of emerging satellite technologies. The latest trend in pay TV is
the increasing demand for high definition content, which is expected to drive sales of GInva‟s customers such as the pay TV provider Astro and set top box provider Echostar. Therefore, lagging adoption in the key markets for these customers would in turn, slow down sales of GInva.
Execution risk – M&A. The company recently acquired Skyware which is still in a
lost making position. However, it remains to be seen if the acquisition will be accretive to the company‟s bottom line, without an observable full year trend. In addition, there is also an execution risk to turn the company around for it to be accretive towards GInva‟s bottomline. The company stated it would be actively seeking inorganic growth opportunities to consolidate smaller independent companies to expand into new markets, technologies and customers. This carries numerous risks as not all companies may end up being accretive towards GInva‟s profits.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 9
Industry Outlook
Growing Satellite Industry. According to the Satellite Industry Association (SIA), the
industry grew by 4% YoY to USD$203bn in 2014, which is higher than the global economic growth of 2.6% in 2014, as seen in Figure 7. This grow was mainly attributed to the growth in satellite services, launch industry and ground equipment. According to Futron‟s 2013 forecast, the industry is forecasted to grow by 6% annually till 2021 as demand for readily available data and heavy reliance on telecommunications network to connect people and businesses will only increase as the world becomes more interconnected. Figure 7: Global Satellite Industry Revenues
Source: Satellite Industry Association 2015
Satellite services growth driver. The main 2 drivers for the growth in the industry
are the satellite services and ground equipment. Satellite services (Figure 8) which counts consumer services such as satellite TV Services and Satellite Broadband as its main revenue contributors is expected to continue to grow going forward as consumers demand HD Quality Television content and faster internet broadband speed. Meanwhile as shown in Figure 10 revenue from consumer equipment for Non-Global Navigation Satellite System (GNSS) grew by 15% YoY to USD$17.9bn. We expect this segment to continue growing in the future as the demand for better entertainment quality and content will drive the needs for the related equipment. Figure 8: Satellite Services Revenue Breakdown
Source: Satellite Industry Association 2015
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 10
Figure 9: Broadband Satellite Bandwidth Demand by Market Segment
Source: NSR 2015
Figure 10: Revenue from Global Satellite Ground Equipment
Source: Satellite Industry Association 2015
Ka-band growth. As mentioned-above, the demand for satellite industry is growing
but the existing C-Band and Ku-band infrastructure is inadequate to support this growth. According to Newsat (2012), Ka-band is the future for the satellite industry due to the diminishing and saturation of the capacity of the existing C and Ku-band. Ka-band is likely to transform the satellite industry in a similar fashion as the C-Band and Ku-band did decades ago. Ka-band is likely the heir of the Ku-band and as with any new technologies born, it will develop to be the main choice for satellite communications worldwide. Further, Futron‟s 2013 report forecasted that Ka-band service demand will grow 22% CAGR till 2021, compared to 2.5% CAGR for C-band and Ku-band over the same period. Please refer to the table in Figure 11 for the main differences between Ka-band and Ku-band.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 11
Figure 11: Main differences between Ka-band and Ku-Band
Ku-band Ka-band
Popularity Well established as the primary spectrum used for mobility networks
The spectrum has not been widely adopted by satellite operators due to its susceptibility to interference from rain and other weather conditions
Frequency (The higher
the frequency the more bandwidth you can squeeze out of the system)
12–18 GHz part of the of the microwave band of the electromagnetic spectrum
26.5–40 GHz part of the of the microwave band of the electromagnetic spectrum
Connection speeds [megabits per second (Mbps)] The headline bandwidth figure usually refers to the transponder bandwidth from the satellites, which need to be shared amongst users
1–2 Mbps 33-50 Mbps
Rain fade rate (decibel (dB)) refers
primarily to the absorption of a microwave radio frequency (RF) signal by atmospheric rain, snow or ice, and losses which are especially prevalent at frequencies above 11 GHz
1dB/sec around 3-5dB/sec
Beam-Technology Wide beams Multi- Spot beam technology
Transponders 27MHz to 54MHz Ku-band transponders
Implement wideband transponders (300MHz – 600MHz)
Antennas Smaller in size than Ku comparable but able to transmit the same transmit gain
Availability (geographical)
Ku has witnessed insatiable demand for global broadband services in recent years, and in some geographical regions the available capacity has become exhausted for particular application requirements. At the same time, Indonesia which has high rain precipitation also uses Ku-Band
Currently, Ka-band services are not as globally available as Ku
Application usage Well established as the primary spectrum used for mobility networks
Media Broadcast, Military
Affected by weather (rain fade and high levels of humidity)
Less More
Source: RHB Data
Increasing demand for data. The primary reason for Ka-band development is due
to the increasing demand for capacity as a result of the need for internet connectivity worldwide across various markets-users such as governments, businesses, media, military and private citizens. Ka-band spectrum ranges from 26.5 - 40GHz, which is an „uncharted territory‟ as the C-band and Ku-band operate at 4 - 8GHz and 12 - 18GHz respectively. This coupled with the use of numerous spot beams allows for much superior frequency reuse, thereby escalating the amount of data throughput that can be achieved. Hence, there is an increasing investments being made for dedicated Ka-band satellites and equipments.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 12
Figure 12: C-band satellite coverage area
Source: NewSat
Figure 13: Ku-band satellite coverage area
Source: NewSat
Figure 14: Ka-band satellite coverage area
Source: NewSat
Bandwidth: 1GHz Beams: 2 hemi
Bandwidth: 3GHz Beams: 2 regional 4 large spot
Bandwidth: 24GHz Beams: 2 regional 2 steerable 20 multi-spot
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 13
Better connectivity and greater data. Using the new Ka-band satellites, customers
are able to have access to greater data, faster network connection speed as well as smaller end-user antennas (VSATs) which allows for a better cost-effective network utilization (Newsat 2012). Further, given the increasingly large investments – both in fixed and mobile terminals - made into this „new‟ satellite by companies such as WildBlue, ViaSat and Hughes, decreased the prices of terminal equipment required. Satellite (2015), forecasted that more than 430 satellites with High Throughput Satellites (HTS) will be built over the next 10 years to meet the growing demand of data required by the telecommunication operators. Smaller antennas. One of the major innovations of Ka-band is the smaller antenna
size relative to its predecessor (Newsat 2012). For example, a 80-100cm diameter Ka-band antenna is equivalent to a 1.8m diameter of Ku-band‟s. This results in cost savings and lower installation costs for suppliers and network operators, thereby lowering the overall cost of network installation. This development, along with increasing mobility and higher bandwidth makes Ka-band an attractive proposition for many industries such as those operating in remote areas - oil and gas exploration and production as well as mining - and also for disaster response.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 14
Financial Forecasts Turnaround of Skyware. We understand that Skyware is close to breaking even in
its recent quarters and has seen orders surge from its major customers due to the replacement and procurement cycle and the switch to a few new generation products expected to happen in FY16. In addition, we expect GInva to improve operational efficiency as well as the restructuring of the management team of Skyware to drive cost savings of USD2-3m on this front. All in all, we expect Skyware to contribute positively to its earnings from FY16 onwards.
Acquisition synergies and cost savings with Skyware global. With the
acquisition of Skyware set to be completed by the end of FY15, we expect management to focus on integrating the North Carolina plant with its global manufacturing footprint and streamlining the U.S supply chain and procurement at the same time. We expect the management team to focus on i) streamlining more processes, ii) improve efficiency, and iii) undertake more cost-cutting measures to improve its gross margins for the overall business. Bullish topline growth going forward. The acquisition of Skyware would add an
addition of USD50m to GInva‟s topline in FY15. Also it will actually support GInva with the ability to manufacture and design Ka-Band dishes, enabling them to supply to their single largest customer the full-service outdoor unit comprising of both Dishes and LNBS. This may be a potential huge growth area for GInva to tap into. Secondly, it provides GInva with Ka-band VSAT terminal related products, opening them to a whole new Ka-Band market, especially in Asia. All in all, we expect revenue to conservatively grow by 18% in FY15 due to the acquisition of Skyware and another 17% in FY16.
Figure 15: Breakdown of revenue (USDm)
Title:
Source:
Please fill in the values above to have them entered in your report
62.092.9 106.3
130.7156.8
188.112.7
22.927.9
28.1
29.5
31.0
18.8%
25.2%23.7%
20.7%23.0%
23.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0
50.0
100.0
150.0
200.0
250.0
FY12 FY13 FY14 FY15F FY16F FY17F
Sat Comms (USDm) (LHS)
Contract Manufacturing (USDm) (LHS)
Gross Prof it Margin (%) (RHS)
Source: RHB, Company data
Figure 16: Sat Communications and Contract Manufacturing growth rate (%)
Title:
Source:
Please fill in the values above to have them entered in your report
50%
14%
23%20% 20%
80%
22%
1%5% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
FY13 FY14 FY15F FY16F FY17F
Sat Comms Growth (%) Contract Manufacturing Growth (%)
Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 15
Positive effects from acquisition synergies and replacement cycle. We expect
acquisition synergies to be realized in FY16, as well as potential savings from the restructuring of Skyware‟s management team and improving operational efficiencies. In addition, the cross selling of Skyware‟s products to GInva‟s existing clients will help contribute positively to its margins.
Figure 17: Global Invacom's GP and GPMs
Title:
Source:
Please fill in the values above to have them entered in your report
14.1
29.2 31.8 32.9
42.9
52.0
18.8%
25.2%23.7%
20.7%
23.0%
23.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
FY12 FY13 FY14 FY15F FY16F FY17F
Gross Prof it (USDm) (LHS) Gross Prof it Margin (%) (RHS)
Source: RHB, Company data
Figure 18: Global Invacom's gross and net margins (%)
Title:
Source:
Please fill in the values above to have them entered in your report
25.2%23.7%
20.7%
23.0% 23.7%
6.9%
3.8%
1.1%
4.5% 4.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
FY13 FY14 FY15F FY16F FY17F
Gross Prof it Margin (%) Net Margins (%)
Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 16
Strong balance sheet – Net cash position. Historically, GInva has been keeping a
strong balance sheet since FY11, with minimal borrowings and a strong net cash position. As of FY14, it has pared down all its debt and has effectively zero borrowings despite making a few acquisitions over the years. This may downplay any fears of the expected raise of the Fed rates affecting their business and profitability. In addition, the dual listing on the AIM market in July 2014 which raised USD15m in gross proceeds, has further strengthened the balance sheet and enabled them to buy Skyware without raising any debt to fund the acquisition.
Figure 19: Net Cash Position (USDm)
Title:
Source:
Please fill in the values above to have them entered in your report
20.2
14.5
21.2
13.8
30.9
34.4
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
FY12 FY13 FY14 FY15F FY16F FY17F
Net Cash Position (USDm)
Source: RHB, Company data
Figure 20: Net cash from operating activities and capex (USDm)
Title:
Source:
Please fill in the values above to have them entered in your report
-2.9
7.7 7.8
-2.4
21.6
8.7
-1.22-2.40 -1.98
-5.0
-2.0 -2.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
FY12 FY13 FY14 FY15F FY16F FY17F
Net cash f rom operating activities (USDm) Capex (USDm)
Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 17
Company Background Recently listed with rich history. GInva is a manufacturer and supplier of satellite
TV and cable peripherals products. In addition, it carries out electronics manufacturing services in China. The company was formed in 2008 through the merger of Global Communications (UK) Ltd and Invacom Ltd, both of which had extremely rich histories of pioneering breakthrough technologies such as multi-switches, band and channel stackers and frequency extenders/converters. GInva was listed on the Singapore Stock Exchange through the reverse takeover of Radiance Group in 2012, and recently achieved a dual listing by successfully listing on the London AIM Market, raising SGD18.7m in the process.
Figure 21: Key Milestones
Year Event
1985 Global Communications was founded by Roger and Helen Pannell.
1988 Global Communications manufactures the first Multi-Switch.
1993 Global Communications manufactures the first ADX frequency extender.
1998 Global Communications invents tvLINKs for BSkyB.
2000 Invacom is founded by ex-employees of Marconi Company.
2001 1 million tvLINKs sold. Launched the world‟s first integrated Very Small Aperture Terminal Low
Noise Blocker.
2006 Founders Roger and Helen go on sabbatical and appoint Anthony Brian Taylor as the new
Managing Director.
2008 Global Communications (UK) Ltd and Invacom Ltd form Global Invacom.
2010 Purchased controlling interest in Radiance Group. Commenced Dish Manufacturing.
2012 Listed on Singapore Exchange following reverse takeover of Radiance. Purchased The Waveguide
Solution Limited.
2013 Purchased and renamed Raven Manufacturing Limited to Global Invacom Manufacturing (UK)
Limited.
2014 Dual listed on London AIM Market Source: RHB, Company data
Suppliers in a complex chain. GInva‟s products are utilised in a variety of
businesses such as broadcasting, building developing and electrical contracting. Their products include low noise blocks (LNB), satellite antennas and very small aperture terminals. They serve the uplink station and dish & LNB sectors of the satellite communications operations process through their two operating segments, contract manufacturing and satellite communications. They have a global presence, with manufacturing activities in the UK, logistical activities in the US and contract manufacturing in China, while being headquartered in Singapore.
Figure 22: Process of sending signal via satellite
Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 18
Figure 23: GInva structure
Source: RHB, Company data
Figure 24: Process Chain
Source: Company
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 19
Handpicked successor. GInva is led by Anthony Brian Taylor, its Chairman.
Appointed in 2006 by founders Roger and Helen Pannell to be the Managing Director of Global Communications, he has steadily grown the company, overseeing the merger of Global Communications (UK) Ltd and Invacom Ltd, the reverse takeover of Radiance Group and the dual listing on the AIM Market in London. He is assisted by a capable management team who has more than 20 years of experience in the satellite communications industry.
Figure 25: Board of Directors
Name Appointment Responsibility
Anthony Brian Taylor Executive Chairman Mr Taylor is the Managing Director of Global Invacom Limited and is also a director of Global Invacom Holdings
Limited. He has worked for international high technology businesses in senior executive leadership roles for over
15 years. He holds a Bachelor of Science, Electronics degree (with Honours) from Coventry University in the
United Kingdom.
Matthew Jonathan Garner Executive Director Mr Garner has extensive financial and commercial management experience of over 25 years. He holds a Degree
in Law with Honours from the University of Liverpool from 1987.
Malcolm John Burrell Executive Director Mr Burrell is a Chartered Engineer with 32 years of RF design, technical management and corporate
management experience. Mr Burrell holds a Bachelor of Science Engineering (Electronic Engineering) degree
from the University of Southampton in the United Kingdom and a Certificate in Management (CIM).
Cosimo Borrelli Independent Director Mr Borrelli is a Chartered Accountant with over 24 years of experience in formal and informal corporate
restructuring, forensic accounting and financial investigations. Mr Borrelli holds a Bachelor's degree in Economics
from the University of Adelaide, Australia.
Basil Chan Non-Executive Director Mr Chan has more than 32 years of audit, financial and general management experience. He holds a Bachelor of
Science (Economics) Honours degree majoring in Business Administration from the University of Wales Institute
of Science and Technology, United Kingdom
John Lim Yew Kong Lead Independent Director Mr Lim is currently a director of Point Hope Pte Ltd, and an independent non-executive director of Karin
Technology Holdings Limited and North Asia Resources Holdings Limited. Mr Lim graduated with a Bachelor's
Degree in Economics from the London School of Economics and Political Science in the England. Source: RHB, Company data
Figure 26: Key Management Team
Name Appointment Responsibility
Andrew Scott Martin Financial Controller Mr Martin is responsible for the overall financial management of the Company‟s operations in United
Kingdom and Israel. He holds a Diploma in Accounting from the Association of Accounting Technicians.
Gordon Blaikie Group Operations Director Mr Blaikie is responsible for the Group‟s operations in Accrington, Malaysia and Shanghai. He has 31
years of experience in manufacturing and operations and was previously the Operations Manager for
Amazon. He holds a Diploma in Production and Inventory Management Control.
David Gerald Smith Technical Director Mr Smith is responsible for the development of low noise block and very small aperture terminal products.
He has been with Invacom Limited and GIL for more than 10 years. Mr Smith holds a Bachelor with
Honours in Electronic and Electrical Engineering from the University of Leeds.
David Jonathan Wren Fugeman Sales & Marketing Director Mr Fugeman is responsible for all Satellite Communication sales to Pay TV providers, broadband by
satellite providers and major Original Equipment Manufacturers. He has been with Global Invacom Limited
for over 24 years.
Jan Treiber Head of Strategic Marketing Mr Treiber is responsible for the Group‟s strategy, internal or external intelligence and special strategic
projects. He holds a Master‟s degree in Telecommunications Engineering from Karlsruhe Institute of
Technology (KIT) in Germany and a Master of Business Administration from Collège des Ingénieurs in
France.
Wendy Isabel Wong Pei Fern Group Financial Controller Ms Wong is responsible for the overall financial, accounting and compliance matters of the group. She
has been in the finance and accounting field for more than 19 years. She holds a Bachelor‟s degree in
Accountancy from Nanyang Technological University, Singapore. Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 20
Business Analysis
Satellite Communications
Main revenue component. Satellite Communications (Sat Comms) contributes the
majority of GInva revenue, with 79.2% of FY14 revenue coming from this segment. The activities of this segment include the development, design and manufacture of products for the satellite TV market. The main sales driver comes from direct broadcast satellite (DBS) equipment, such as switches, LNBs, and satellite dishes. In FY14, sales of DBS equipment contributed 60.6% to overall FY14 revenue, and showed the strongest growth within the segment, which also includes sales from recently acquired subsidiaries The Waveguide Solution, a microwave waveguide transmission specialist and OnePath Networks, a pioneer in the Radio Frequency over fibre technology.
Figure 27: Sat Comms and overall gross margins (%)
Title:
Source:
Please fill in the values above to have them entered in your report
21%
29%27%
23%
26% 26%
19%
25%24%
21%23% 24%
0%
5%
10%
15%
20%
25%
30%
35%
FY12 FY13 FY14 FY15F FY16F FY17F
Sat Comms (%) Overall (%)
Source: RHB, Company data
Figure 28: Low Noise Block
Source: RHB, Company data
Figure 29: Very Small Aperture Terminal
Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 21
Contract Manufacturing
Handles a high variety mix of products. GInva has a contract manufacturing
facility in Shenzhen, China that caters to Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM). In addition to manufacturing the customer‟s product, the facility is capable of carrying out product design, prototyping and testing. The factory has been designed to handle high-mix orders of varying volumes, ranging from hundreds to hundreds of thousands. In FY14, this segment made up 20.8% of revenue.
Figure 30: Contract Manufacturing and overall gross margins (%)
Title:
Source:
Please fill in the values above to have them entered in your report
10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
19%
25%24%
21%
23% 24%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
FY12 FY13 FY14 FY15F FY16F FY17F
Contract Manufacturing Overall Gross Margins (%)
Source: RHB, Company data
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 22
Financial Exhibits
Profit & Loss (USDm) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F
Total turnover 116 134 159 186 219
Cost of sales (87) (102) (126) (143) (167)
Gross profit 29 32 33 43 52
Gen & admin expenses (20) (26) (30) (34) (39)
Selling expenses (0) (0) (0) (0) (0)
Other operating costs 1 (1) (1) (0) (1)
Operating profit 9 5 2 9 12
Operating EBITDA 11 8 3 11 14
Depreciation of fixed assets (1) (2) (2) (2) (2)
Amortisation of intangible assets (0) (0) - - -
Operating EBIT 9 5 2 9 12
Interest expense 0 0 - - -
Pre-tax profit 9 6 2 9 12
Taxation (1) (0) (0) (1) (1)
Profit after tax & minorities 8 5 2 8 11
Reported net profit 8 5 2 8 11
Recurring net profit 8 5 2 8 11
Source: Company data, RHB
Cash flow (USDm) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F
Operating profit 9 5 2 9 12
Depreciation & amortisation 1 2 2 2 2
Change in working capital (3) 1 (6) 11 (4)
Other operating cash flow (1) 1
Operating cash flow 7 9 (2) 22 10
Interest paid 0 0 - - -
Tax paid 1 (2) (0) (1) (1)
Cash flow from operations 8 8 (2) 22 9
Capex (2) (2) (5) (2) (2)
Other investing cash flow (11) (9) - - -
Cash flow from investing activities (13) (11) (5) (2) (2)
Increase in debt (0) (0) - - -
Other financing cash flow (1) 11 - (3) (3)
Cash flow from financing activities (1) 11 - (3) (3)
Cash at beginning of period 21 15 21 14 31
Total cash generated (7) 8 (7) 17 3
Forex effects 1 (1) - - -
Implied cash at end of period 15 21 14 31 34
Source: Company data, RHB
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 23
Financial Exhibits
Balance Sheet (USDm) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F
Total cash and equivalents 15 21 14 31 34
Inventories 26 27 33 21 25
Accounts receivable 19 15 18 21 25
Other current assets 2 3 3 3 3
Total current assets 62 66 68 76 87
Tangible fixed assets 11 11 14 14 14
Intangible assets 6 9 9 9 9
Total other assets 0 1 0 0 0
Total non-current assets 17 20 23 23 23
Total assets 79 87 91 99 110
Short-term debt 0 - - - -
Accounts payable 16 14 18 20 24
Other current liabilities 12 11 11 11 11
Total current liabilities 29 26 29 31 35
Other liabilities 6 1 1 1 1
Total non-current liabilities 6 1 1 1 1
Total liabilities 35 27 30 32 36
Share capital 45 57 57 57 57
Other reserves (0) 3 5 11 18
Shareholders' equity 45 60 62 68 75
Other equity - - (1) (1) (1)
Total equity 45 60 61 67 74
Total liabilities & equity 79 87 91 99 110
Source: Company data, RHB
Key Ratios (USD) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F
Revenue growth (%) 55.0 15.9 18.4 17.3 17.6
Operating profit growth (%) na (40.9) (66.2) 388.3 29.8
Net profit growth (%) na (36.5) (66.5) 388.3 29.8
EPS growth (%) na (45.3) (64.6) 388.3 29.8
BVPS growth (%) 23.5 15.6 8.7 9.4 11.2
Operating margin (%) 8.0 4.1 1.2 4.8 5.3
Net profit margin (%) 6.9 3.8 1.1 4.5 4.9
Return on average assets (%) 10.5 6.1 1.9 8.8 10.3
Return on average equity (%) 19.9 9.7 2.8 12.9 15.2
Net debt to equity (%) (32.4) (35.3) (22.6) (46.2) (46.2)
DPS 0.00 0.00 0.00 0.01 0.01
Recurrent cash flow per share 0.03 0.03 (0.01) 0.08 0.03
Source: Company data, RHB
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 24
SWOT Analysis
Competes in a specialized industry.
Healthy balance sheet with low gearing and strong cash generation ability.
High Barriers to entry
Competition in China for contract manufacturing
Listing on London AIM Market provides funds for inorganic growth.
Demand for high definition content in emerging markets driving satellite equipment sales.
Key customer accounted for 46% of revenue in FY14.
Execution risk
-2,000%
-1,417%
-833%
-250%
333%
917%
1,500%
0
5
10
15
20
25
30
Jan
-13
Jan
-14
Jan
-15
Jan
-16
Jan
-17
P/E (x) vs EPS growth
P/E (x) (lhs) EPS growth (rhs)
-70%
-53%
-37%
-20%
-3%
13%
30%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Jan
-13
Jan
-14
Jan
-15
Jan
-16
Jan
-17
P/BV (x) vs ROAE
P/B (x) (lhs) Return on average equity (rhs)
Source: Company data, RHB Source: Company data, RHB
Company Profile Global Invacom Group Limited, an investment holding company, engages in the research and development, design, and supply of integrated satellite communications equipment in America, Europe, Asia, and internationally. The company was founded in 1985 and is headquartered in Singapore.
Global Invacom Group (RAD SP)
24 August 2015
See important disclosures at the end of this report 25
Recommendation Chart
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
0.55
0.60
Aug-10 Dec-11 Mar-13 Jun-14
Price Close
Source: RHB, Bloomberg
Date RecommendationTarget Price Price
2015-08-22
Source : RHB, Bloomberg
26
RHB Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage
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United States
This report was prepared by RHB and is being distributed solely and directly to “major” U.S. institutional investors as defined under, and pursuant to, the
requirements of Rule 15a-6 under the U.S. Securities and Exchange Act of 1934, as amended (the “Exchange Act”). RHB is not registered as a broker-
dealer in the United States and does not offer brokerage services to U.S. persons. Any order for the purchase or sale of the securities discussed herein
that are listed on Bursa Malaysia Securities Berhad must be placed with and through Auerbach Grayson (“AG”). Any order for the purchase or sale of all
other securities discussed herein must be placed with and through such other registered U.S. broker-dealer as appointed by RHB from time to time as
required by the Exchange Act Rule 15a-6.
This report is confidential and not intended for distribution to, or use by, persons other than the recipient and its employees, agents and advisors, as
applicable.
Additionally, where research is distributed via Electronic Service Provider, the analysts whose names appear in this report are not registered or qualified
as research analysts in the United States and are not associated persons of Auerbach Grayson AG or such other registered U.S. broker-dealer as
appointed by RHB from time to time and therefore may not be subject to any applicable restrictions under Financial Industry Regulatory Authority
(“FINRA”) rules on communications with a subject company, public appearances and personal trading.
Investing in any non-U.S. securities or related financial instruments discussed in this research report may present certain risks. The securities of non-U.S.
issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on non-U.S. securities
or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements
comparable to those in the United States.
The financial instruments discussed in this report may not be suitable for all investors.
Transactions in foreign markets may be subject to regulations that differ from or offer less protection than those in the United States.
OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST
Malaysia
RHB does not have qualified shareholding (1% or more) in the subject company (ies) covered in this report except for:
a) -
RHB and/or its subsidiaries are not liquidity providers or market makers for the subject company (ies) covered in this report except for:
a) -
RHB and/or its subsidiaries have not participated as a syndicate member in share offerings and/or bond issues in securities covered in this report in the
last 12 months except for:
a) -
RHB has not provided investment banking services to the company/companies covered in this report in the last 12 months except for:
a) -
Thailand
RHB OSK Securities (Thailand) PCL and/or its directors, officers, associates, connected parties and/or employees, may have, or have had, interests
and/or commitments in the securities in subject company(ies) mentioned in this report or any securities related thereto. Further, RHB OSK Securities
(Thailand) PCL may have, or have had, business relationships with the subject company(ies) mentioned in this report. As a result, investors should
exercise their own judgment carefully before making any investment decisions.
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Indonesia
PT RHB OSK Securities Indonesia is not affiliated with the subject company(ies) covered in this report both directly or indirectly as per the definitions of
affiliation above.
Pursuant to the Capital Market Law (Law Number 8 Year 1995) and the supporting regulations thereof, what constitutes as affiliated parties are as follows:
1. Familial relationship due to marriage or blood up to the second degree, both horizontally or vertically;
2. Affiliation between parties to the employees, Directors or Commissioners of the parties concerned;
3. Affiliation between 2 companies whereby one or more member of the Board of Directors or the Commissioners are the same;
4. Affiliation between the Company and the parties, both directly or indirectly, controlling or being controlled by the Company;
5. Affiliation between 2 companies which are controlled, directly or indirectly, by the same party; or
6. Affiliation between the Company and the main Shareholders.
PT RHB OSK Securities Indonesia is not an insider as defined in the Capital Market Law and the information contained in this report is not considered as
insider information prohibited by law.
Insider means:
a. a commissioner, director or employee of an Issuer or Public Company;
b. a substantial shareholder of an Issuer or Public Company;
c. an individual, who because of his position or profession, or because of a business relationship with an Issuer or Public Company, has access to
inside information; and
d. an individual who within the last six months was a Person defined in letters a, b or c, above.
Singapore
RHB Research Institute Singapore Pte Ltd and/or its subsidiaries and/or associated companies do not make a market in any securities covered in this
report, except for:
(a) -
The staff of RHB Research Institute Singapore Pte Ltd and its subsidiaries and/or its associated companies do not serve on any board or trustee positions
of any issuer whose securities are covered in this report, except for:
(a) -
RHB Research Institute Singapore Pte Ltd and/or its subsidiaries and/or its associated companies do not have and have not within the last 12 months had
any corporate finance advisory relationship with the issuer of the securities covered in this report or any other relationship (including a shareholding of 1%
or more in the securities covered in this report) that may create a potential conflict of interest, except for:
(a) -
Hong Kong
RHBSHK or any of its group companies may have financial interests in in relation to an issuer or a new listing applicant (as the case may be) the securities
in respect of which are reviewed in the report, and such interests aggregate to an amount equal to or more than (a) 1% of the subject company‟s market
capitalization (in the case of an issuer as defined under paragraph 16 of the Code of Conduct for Persons Licensed by or Registered with the Securities
and Futures Commission (the “Code of Conduct”); and/or (b) an amount equal to or more than 1% of the subject company‟s issued share capital, or issued
units, as applicable (in the case of a new listing applicant as defined in the Code of Conduct). Further, the analysts named in this report or their associates
may have financial interests in relation to an issuer or a new listing applicant (as the case may be) in the securities which are reviewed in the report.
RHBSHK or any of its group companies may make a market in the securities covered by this report.
RHBSHK or any of its group companies may have analysts or their associates, individual(s) employed by or associated with RHBSHK or any of its group
companies serving as an officer of the company or any of the companies covered by this report.
RHBSHK or any of its group companies may have received compensation or a mandate for investment banking services to the company or any of the
companies covered by this report within the past 12 months.
Note: The reference to “group companies” above refers to a group company of RHBSHK that carries on a business in Hong Kong in (a) investment
banking; (b) proprietary trading or market making; or (c) agency broking, in relation to securities listed or traded on The Stock Exchange of Hong Kong
Limited.
30
Kuala Lumpur Hong Kong Singapore
RHB Research Institute Sdn Bhd Level 11, Tower One, RHB Centre
Jalan Tun Razak Kuala Lumpur
Malaysia Tel : +(60) 3 9280 2185 Fax : +(60) 3 9284 8693
RHB OSK Securities Hong Kong Ltd.
12th Floor
World-Wide House 19 Des Voeux Road Central, Hong Kong
Tel : +(846) 2465 1118 Fax : +(846) 2810 0908
RHB Research Institute Singapore
Pte Ltd (formerly known as DMG & Partners Research Pte Ltd)
10 Collyer Quay #09-08 Ocean Financial Centre
Singapore 049315 Tel : +(65) 6533 1818 Fax : +(65) 6532 6211
JaK-arta Shanghai Phnom Penh
PT RHB OSK Securities Indonesia
Wisma Mulia, 20th Floor Jl. Jend. Gatot Subroto No. 42
JaK-arta 12710, Indonesia Tel : +(6221) 2783 0888 Fax : +(6221) 2783 0777
RHB OSK (China) Investment Advisory Co. Ltd.
Suite 4005, CITIC Square 1168 Nanjing West Road
Shanghai 20041 China
Tel : +(8621) 6288 9611 Fax : +(8621) 6288 9633
RHB OSK Indochina Securities Limited
No. 1-3, Street 271 SangK-at Toeuk Thla, Khan Sen Sok
Phnom Penh Cambodia
Tel: +(855) 23 969 161 Fax: +(855) 23 969 171
Bangkok
RHB OSK Securities (Thailand) PCL
10th Floor, Sathorn Square Office Tower 98, North Sathorn Road, Silom
Bangrak, Bangkok 10500 Thailand
Tel: +(66) 2 862 9999 Fax : +(66) 2 862 9799