Excerpts from analysts' reports on NeraTel

RHB Research says 'buy', target price 80 cents

Analyst: Jarick Seet

NeraTel
Share price: 
67 c
Target: 
80 c

Despite dismal results due to forex loss, we are more optimistic, as:

1. Telecom and Network Infrastructure business revenue fared better, up 19.3% and 10.1% YoY in 1H16 respectively;

Nera Telecommunications’ (Nera) 1H16 order intake increased 29.3% YoY to SGD61m, with Singapore remaining the dominant contributor. Photo: Company
2. Underperforming POS business is to be sold off; 

3. We expect a special dividend of at least SGD0.16 by end-September. Total dividend yield will likely shoot up to 26%, with its recurring 2 cents dividend.

We think current price levels are very attractive; maintain TRADING BUY from a DCF-backed TP of SGD0.80 (19% upside).


Full report here. 


♦ UOB Kayhian says 'buy', tp $.835

Analyst: Edison Chen

NeraTel
Share price: 
67 c
Target: 
83.5 c

Maintain BUY and SOTP-based target price of S$0.835. We believe the poor 2Q16 headline results should create some price weakness for the stock.

If the share price falls by a sufficient extent, this could serve as an excellent opportunity for investors to buy into weakness. Our SOTP-based target price of S$0.835 remains unchanged as the underlying fundamentals remain intact.

SHARE PRICE CATALYST

Announcement of the special dividends. An announcement of special dividends (from the POS sale) should drive the share price closer to our target price as we believe this is something that the market has yet to price in.

Full report here. 

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