By DASHVEENJIT KAUR / Graphic By TMR
Binasat Communications Bhd, due to be listed on Jan 8 on the ACE Market, posted a net profit of RM1.53 million, or earnings per share of 0.88 sen, in its first quarter (1Q) ended Sept 30, 2017.
The telecommunication support service provider recorded a revenue of RM10.16 million for the period, its exchange filing last Friday noted.
The financial filing was its first ahead of its listing, whereby the company intends to raise about RM39.55 million to help finance the setting up a teleport and spend on its ope- rations and maintenance, and enhance its fibre-optic network capabilities in the Klang Valley and in Laos, Myanmar and Vietnam.
The public portion of its initial public offering (IPO) was oversubscribed by 34.23 times.
A total of 10,465 applications for 458.02 million shares were received for the 13 million new shares offered for public subscription at 46 sen apiece.
Half of the shares (6.5 million) were set aside for allotment under the Bumiputera category and was oversubscribed by 29.69 times.
The IPO comprises 85.979 million shares for public issue and 40 million shares offered for sale.
Inter-Pacific Research Sdn Bhd noted Binasat offers earnings growth potential and attractive dividend returns and has put a target price of 55 sen, representing an upside potential of 26% from the IPO price of 46 sen.
The research firm noted Binasat Communications’ new revenue growth catalysts from its new additions to its suite of services.
“We expect growth through margin expansion from efficiency gains via cost management efforts, sustainable recurring income and potentially very attractive dividend returns,” the research firm noted in a recent report.
The investment risk for investors is Binasat Communications’ dependence on two major customers (Maxis Broadband Sdn Bhd and Huawei Technologies Malaysia Sdn Bhd), as well as competition from other telecommunications network support players.
Some RM10.79 million from Binasat Communications’ IPO will be used for working capital over a two-year period, while RM1.5 million has been allocated for its expansion into Laos, Myanmar and Vietnam.