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CMC Infocomm Limited - IPO Factsheet

Shared By Stock Fanatic on Monday, August 10, 2015 | 10.8.15

CMC Infocomm Limited is a regional integrated and innovative communications solutions and services provider. With over 20 years of experience in the telecommunications industry, CMC has completed more than 80 projects in Singapore, Thailand, the Philippines and Malaysia since 2011.

Leveraging on the technical know-how and expertise in communications solutions, CMC is able to offer integrated and innovative communications solutions and services to communications network operators and vendors.

The business is divided into four main segments:
(i) In-Building Coverage,

(ii) Outdoor Construction,

(iii) Telecommunications Implementation, and

(iv) Maintenance Services.

Competitive Strengths

Long-standing relationships with clients, suppliers and vendors
CMC has established a firm reputation in providing consistently reliable solutions and services. Its regular customers include M1, Nokia, Globe and AIS. Close relationships with suppliers enable CMC to provide a comprehensive range of solutions and services and respond to the needs of its customers in a timely and cost-effective manner.

Regional presence with operations in Singapore, Thailand and the Philippines
Through its regional network of business contacts, CMC is able to source for higher quality cables and components at competitive prices, allowing the company to provide costeffective solutions and services.

Providing full turnkey solutions
CMC has the expertise and ability to provide complete solutions and services from planning and design, to construction and implementation of its customers’ mobile network infrastructure in an efficient and cost-effective manner.

Significant barriers to entry
The telecommunications industry is highly competitive, as substantial technical expertise and significant capital investments are required.

Ability to meet the evolving requirements of customers
Capitalising on its past experience and current knowledge of the industry, CMC is able to provide more complete and innovative solutions to meet the evolving requirements of its customers.

Sponsor, Issue Manager, Underwriter and Placement Agent :
SAC Capital Private Limited
Prospectus :
Offering Price :
 Offering Size: 
- 24m New Shares comprising:

(a) 21.6m by way of placement

(b) 2.4m public offering
Market Capitalisation (Post IPO) :
EPS (S cents) :
0.30 (9m2015A), based on post-Invitation share capital
Historical P/E :
Net Loss (FY14A), based on post-Invitation share capital
P/NAV (X) :
2.5 (9m2015A), based on post-Invitation share capital
Gross Proceeds :
Use of proceeds :
- (a) $3.8m for expansion of business operations and repayment

- (b) $0.18m for General working capital

- (c) $3.98m - Net proceeds

- (d) $2.02m for Listing expenses
 Indicative Timeline :
 Public Offer Close : 
11 August 2015, Tuesday, 12 noon
 Expected Listing: 
13 August 2015, Thursday 9 a.m (Catalist)

Business Strategies and Outlook

Expanding into new geographical markets
CMC intends to continue expanding its operations in Singapore, Thailand and the Philippines and to also expand to new geographical markets in neighbouring ASEAN countries such as Malaysia and Indonesia.

Expanding into new and complementary businesses
CMC intends to

(a) expand its current scope of communications solutions and services,

(b) venture into complementary businesses, and

(c) venture into the business of owning and leasing distributed antenna systems to communications network operator. 

Upgrading of telecommunications infrastructure
The increased mobile device penetration rates, and the rising demand for data bandwidth would drive communications network operators to continuously upgrade and improve their existing telecommunications infrastructure.

Collaborative initiatives of the Singapore government
The Singapore government has unveiled a wide range of collaborative government initiatives. There are also plans for deployment of above-ground boxes to provide a ready-built common infrastructure.

Increasing mobile data usage 
The mobile data usage in Singapore has also been increasing steadily from 4.08 petabytes in the fourth quarter of 2011 to 9.69 petabytes in the first quarter of 2015.

Key Risks

Licence required for business operations
The subsidiary, CMCC Philippines may be required to cease its business operations or be penalised for operating without a PCAB licence.

Absence of long-term agreements with major clients
CMC does not enter into long-term agreements with any of its customers. There is no assurance that the contracts will continue to be renewed when they expire.

Dependent on skilled employees and foreign labour
Changes in the labour policies of foreign workers’ may affect the supply of foreign labour and cause disruptions to business operations.

Affected by changes in technology
The telecommunications industry is dynamic and is characterised by evolving market trends and technological changes, thus CMC may be unable to compete with other players in the industry.

Intense competition in securing new projects 
CMC’s business is mainly project-based and secured through a tender process. It is dependent on the company’s ability to secure new projects.

Reliant on suppliers and sub-contractors 
CMC does not enter into long-term agreements with any of its suppliers or sub-contractors. Any adverse change may result in cost overruns and project delays.

Dividend Policy 
The Group intends to distribute a dividend of at least 20% of net profit to shareholders for FY2016. (Read Report)

Read Related Report
Idea Of The Day - CMC Infocomm Limited - IPO
Tuesday, 11 August 2015
- Lim & Tan Research

Source : DBS Group Research

Posted on Monday, August 10, 2015 | 10.8.15
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