BUSINESS:
The Singapore based company is principally engaged in the installation and maintenance of structured cabling systems (eg LAN, WAN). Major clients include banks and global MNC in the region.
OVERVIEW:
Last year July, 1-Net Singapore announced the launch of new data centre, 1-Net North. End of 2014, foreign player, Telekommunikasi (subsidiary of PT Telekocommunikasi Indonesia) was awarded to build 8000 sq meter side as data center so as to serve its growing customer. To strengthen Singapore's position as economic and infocomm hub, IDA, EDB and JTC have plans to develop a data centre park which is estimated to consist of 6-8 data centre buildings, targeted to be operational in early 2016. Looking at the trend of mushrooming data centres in the country, Lantronvision is deemed to be benefited especially with its position as domestic leading cabling system provider. Besides, the counter has exposure into overseas, such as Hong Kong, Taiwan, Thailand and India. It can be viewed as proxy of investment into rising demand of data centres in the regions.
REASONS TO BUY:
The company is in cash rich position of $77m which translates to ~ 60% of its market capitalization. It used to release $0.03/shares as annual dividend, so dividend yield is attractively >5% based on current trading price.
The counter doesn't have high trading volume, so it mainly belong to long term holding stock. Recent downfall present an good opportunity for bargain hunters. Generally local broker firms rate this counter with target price > $0.60/shares.
ENTRY PRICE
BUY < $0.52 which is the support price formed since May of 2014.
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