OVERVIEW:
Listed on SGX since 2013, APPT is the first listed business trust which focus on pay-TV business. Its seed asset, Taiwan Broadband Communication Group ("TBC Group"), is Taiwan's leading cable TV operator. It is a provider of cable TV services in 5 closely clustered franchise areas in Taiwan, namely South Taoyuan, Hsinchu County, North Miaoli, South Miaoli and Taichung City. The services include basic cable TV, premium digital cable TV and broadband services to households and businesses.
HIGHLIGHTS:
(1) 2Q2015 results saw earning up 2.4% year on year. Premium digital cable TV revenue was up 11.6% mainly due to more subscribers being signed up. The rest of two segment, namely basic cable TV and broadband services achieved steady results as well.
(2) TBC continued the roll out of digital set-top boxes across its 5 franchise areas and achieved penetration of 100%. Thus TBC remains at the forefront of digitization in Taiwan.
(3) TBC's core network has been expanded to cover well in excess of 30% homes in the new coverage area in greater Taichung region.
INVESTMENT THEMES:
(1) The board of directors gave guidance that dividend for 2015 being at least equal to 0.0825 per share. It will be distributed at least 0.02 for 1st to 3rd quarter and 0.025 for last quarter. Based on current trading price, it represents dividend yield > 8%. A strong dividend play for long term investor.
(2) Based on Discounted Cash Flow model (DCF), CIMB rated the counter at 1.28. Current trading price presents >30% of potential value gain.
(3) Since releasing latest results, the counter has been trading with upward movement. From the chart, moving averages of 10 days and 20 days are narrowing and pointing upwards. Traders could position for short term price gain.
ENTRY PRICE:
Buy ~ $0.85.
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