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Ye Tianyun, CEO, 8Telecom. File photo by Sim Kih

8 Telecom is a small cap – and a S-chip! - that is enjoying the 3G boom in China, and has made a number of happy moves for minority shareholders this year.

It has surprised them with an interim dividend payout of 1.185 Singapore cents a share. It didn’t have a dividend for the corresponding period last year.

The dividend yield has been fabulous this year - at 11.85% for investors who bought the stock at 10 cents. It is now hovering at 15 cents. 

That yield doesn't take into account the fact that in May this year, prior to the release of its half-year results, the company had paid out the final dividend of 0.111 cent per share for FY 2008.

The stock has jumped five fold - from 3 cents in March to around 15 cents now. Which shareholder can complain? And there is likely to be a final dividend to look forward to in a few months time.


The Group’s revenue from continuing operations rose 25.8% to RMB92.7 million in 3Q2009 from RMB73.7 million in 3Q2008, underlining the steady growth of its core businesses as China’s telecom operators continue to invest heavily in expanding their 3G network coverage across the country.

The Group’s net profit from continuing operations surged 279.9% y-o-y to RMB8.2 million in 3Q2009 compared to RMB2.1 million in 3Q2008.
 

 
8Telecom  

Stock price

15 cts
Market cap S$71.8 m
Net asset value 60.11 RMB cents
1-year return 449%
52-week stock low/high 3/17 cents
 

RMB 60.3 m property development sale

Consecutively, cash and cash equivalents rose to RMB141.6 million from RMB23.5 million
a year ago.

Adding to the positive underlying business fundamentals, on Sept 30, the
Group announced it had completed the sale of 5,363.7sqm of office space in its property development, Linping Times Square.

Total consideration for the property, which has a total gross floor area of 47,000 sqm, was RMB60.3 million

Revenue and cost from the sale of the office units will be recognised during the last quarter of 2009 upon the transfer of these units to the buyers. The Group expects progressive sales from this project over the rest of FY2009.

Minority shareholders would have been delighted when on Oct 16, 8 Telecom started its share buyback programme following the shareholder approval of the buyback mandate in April 09.

 
8Telecom No. of shares purchased in the past 3 months Cumulative purchases to date % of issued share capital
Daily share buyback 6,223,000 6,223,000 1.299
 

Its first purchase involved 1,036,000 shares at 15 cents apiece and now exceeds 6.2 million shares in total.

Its CEO, Ye Tianyun, had been buying shares of the company in the earlier part of the year.

The stock price has held steady at around 15 cents in recent months, which is above the Net Asset Value of
60.11 RMB cents (about 12 Singapore cents).

Based on its 9 months of earnings totaling RMB22.5 million and 478.9 million shares outstanding, the EPS is 47.2 RMB cents.

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