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Q1 was solid and in line with expectations (note that TMUS released a slightly better than expected Q1 on 27 April).
DT is both a US growth story and something of a bargain in Europe. We remain at Buy. In the event of a rebound in the Nasdaq and high-PE stocks and, inversely, were the telecom sector to suffer a correction after its recent rise, DT remains the stock to hold as it should then be pulled up by TMUS.
Companies: Deutsche Telekom AG
TMUS had already released an outlook well above consensus for 2022 two weeks ago.
Excluding TMUS, DT’s Q4 performance is indeed in line with expectations but quite good for a European telco.
The 2022 guidance remains cautious for the European part but, excluding TMUS, DT’s market cap is today only €20bn. This indeed corresponds to a “European” yield of…15%. DT is indeed both a US growth story and quite a bargain in Europe.
TMUS had already released better than expected EPS in Q3 a week ago.
Excluding TMUS, DT’s Q3 performance is indeed also slightly better than expected and quite good for a European telco.
The full-year guidance has therefore been raised and also the dividend for 2021.
Excluding TMUS, DT’s market cap is today only €20bn. This indeed corresponds to a “European” yield of… 15%. DT is both a US growth story and quite a bargain in Europe.
A solid Q1 for Deutsche Telekom. Excluding the US (which had already released better than expected numbers on 4 May, allowing TMUS stock to grow by c.4% last week) the European EBITDAaL was better than expected, up by 4.5% yoy with, in particular, a solid growth in Germany and the Netherlands and in GD towers.
We remain at Buy on the stock. One must keep in mind that, looking further into the 2020s, TMUS could allow DT to increase its dividends significantly.
The new US 5G auction proceeds have eventually slightly exceeded $80bn and Verizon was responsible for more than 55% of the overall spend. There is no doubt that Verizon needed the spectrum but it has to pay quite a huge price of… $45.5bn.
This auction is an opportunity to take stock of the value gap between Verizon and Deutsche Telekom.
Correct Q4 for DT. It was indeed good but, remember, TMUS had already released its better than expected numbers on 5 February.
The European Q4 EBITDAal grew by c.3.5% yoy and lfl with a good resilience in Germany and in the rest of Europe, and a slight slowdown on the Netherlands and towers sides.
The dividend yield is now 4% and offers less upside over the short term. But, remember, T-Mobile US doesn’t distribute any dividend for… the moment.
A good release for Deutsche Telekom but note T-Mobile US had already released its Q3 numbers a week ago so this is not totally a surprise.
We remain at Buy on the stock: the key point to keep in mind is that, if T-Mobile US were to distribute a dividend with its current annual EBITDA less capex of c.€12bn, it could allow Deutsche Telekom to practically double its dividend.
Softbank has eventually decided to accelerate the disposal of its stake in T-Mobile US.
In the transactions, Deutsche Telekom will receive call options over c.8% of the capital of T-Mobile US. The group should invest eventually around €10bn to increase its stake from 43.5% to 51.5%.
A very solid Q1 for Deutsche Telekom whose stock price does not deserve to still be 15% down compared to end February.
We remain at Buy on the stock with a 30% upside. The only weak point is that Deutsche Telekom lowered six months ago its dividend for the coming years to €0.6 to invest record amounts in fibre and 5G. The dividend yield is now 4.45% (like Swisscom) and offers less upside.
A ruling in favour of the merger of T-Mobile US and Sprint and solid Q4 results have raised DT’s stock price in these last two weeks. We remain at Add on the stock but note that the dividend for 2019 will be €0.6 (vs €0.7 for 2018), the group investing record amounts in fibre and 5G. The dividend yield is now at 3.65%, well below the average of its peers at 5.15% and does not offer a real upside.
A good return to normalcy in Q1 after the last impressive Q4.
Organic revenue growth stood at 3.5% yoy while EBITDA grew by 3.9% (excluding FX, the consolidation of Tele2 Netherlands and the IFRS16 impact). This is in the top end of the range given by management for 2019 (EBITDA should grow by 2-4% yoy).
We maintain our opinion at Buy on the stock while still waiting for the approval of the merger between T-Mobile US and Sprint.
Quite a good set of results in Q4 with organic revenue growth (adjusted from FX) of 5.7% yoy (vs. +4.7% in Q3 and 2.2% in H1) and EBITDA growth of 12.6% yoy (vs. +8.5% in Q3 and +5.2% in H1). A clear and slightly better than expected growth acceleration compared to the previous quarters.
But this performance was once again essentially due to the American growth driver, T Mobile US, which recorded (in US$) 7.2% yoy revenue growth and an impressive 22.6% yoy EBITDA growth. In Germany, revenues de
Good set of results for DT in Q3.
With a dividend yield of 4.8%, DT is, however, one of the top of the class in its sector along with Orange, Swisscom or Elisa.
The only worrying issue is on the TV side. After its deal with Liberty, Vodafone should be able to offer TV and ultrafast broadband services to 25m German homes, while DT lags in its ftth deployment. But it should win market shares at the expense of satellite operators.
In Q1 18, revenues declined 2.8% to €18.34bn as the US currency weakened by about 10%. Adjusted for FX and consolidation effects, Deutsche Telekom could report organic growth of 1.3% to €18.4bn, based on underlying growth in most of its markets. EBITDA declined by 7.2% to €5.27bn, affected by special factors, mainly early retirement, which did not occur in Q2 17. The margin therefore declined from 31.7% to 30.2%. The adjusted EBITDA showed a much stronger performance with organic growth of 3.9%
At the Capital Markets Day (CMD), the management of Deutsche Telekom published guidance for revenues, adjusted EBITDA and free cash flow from 2018 to 2021. Revenues are expected to grow between 1% and 2% always on an adjusted basis (mainly at constant currency) and adjusted EBITDA is expected to grow by between 2% and 4%. The free cash flow will grow by 10% per year.
The dividend for the current financial year is expected to increase from €0.65 to €0.70 per share (floor remains at €0.50 per sh
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Reaching the Inflection Point
Companies: CyanConnode Holdings plc
CyanConnode is a market-leading provider of telecommunications technology in the smart meter industry and is currently geared towards the vast expansion programme of electricity meter set out by the Government of India. In the past year it has built on its prior success, growing revenue by c50% and reducing net losses by c60% bringing it closer to profitability. CyanConnode trades on an FY1 EV/Sales multiple of 2.7x, which is a discount to its peer group trading on 4.1x. This leads us to an impl
Companies: SRT Marine Systems plc
No leavers today.
Leavers: No leavers today.
What’s cooking in the IPO kitchen?**
Milton Capital Plc, a new type of special purpose acquisition company, intends to join the Standard Segment of the Main Market. The directors intend to search initially for acquisition opportunities in the technology sector. The focus for the prospective acquisition is megatrends. This includes sectors such as space, artificial intelligence, machine learning and blockchain technology. Ticker upon admission
Companies: VRCI BRCK FUM INDI ORR OBD QFI RGD REDX SRT
SRT Marine has today issued a trading update for the six months ending 30
September 2022. H1 23 revenue of £18.8m was up considerably (300%) on
the £4.7m reported at H1 22. The principal driver of this growth is the fact
that the Systems division passed a number of key milestones, generating
revenue of c.£13.6m, up from £0.5m the year before. Management
estimates that a minimum profit before tax of £1.5m was generated in the
period, versus a loss of £3.1m at H1 22. The statement confirms
Progressive Equity Research
FY22 results confirm that the year to March was in line with expectations. Systems deployments were delayed by lockdowns so virtually all the sales were from the Transceivers business, itself struggling to meet growing demand while constrained by component shortages. Meanwhile, SRT continued to invest in its product portfolio and capability to deliver multiple large Systems projects around the world, resulting in a significant loss for the year. However, that investment has substantially improve
Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
Companies: ANX IBPO CYAN SOM EQT AFM
CyanConnode has steadily been making progress in India, where the national smart meter programme has been gathering pace. In July 2022, the company crossed the one million mark for meters connected to its RF network across nine Indian states. This is the aggregate RF device number in India connected since 2014 and represents market share of 22%. The latest update from the company states an order book of 2.6m RF nodes for India. Performance of smart meters is a critical aspect of the Indian progr
Hardman & Co
Significant contract resumed and further cost cuts
CyanConnode released a solid trading update on 12 January which confirmed the Group was trading in line with market forecasts and demonstrated the renewed momentum the Group has seen in the past 12 months as COVID restrictions have eased and deliveries have accelerated. With a cash balance at end of December of £1 million, we believe cash will have been received from customers post period end. We understand debtors are in the region of £5.5m in India alone and with the Indian subsidiary now bein
A bland trading update with Q1 service revenues up by 2.5% yoy and lfl (vs+ 2.5% in Q4).
We maintain our opinion at Buy. The stock is currently around the 130p level. We are still waiting for a catalyst to boost the stock which remains discounted to its peers due to the scepticism and mistrust towards its CEO (under fire after missing opportunities in Italy, Spain and with Vantage).
Companies: Vodafone Group Plc
Companies: BATM Advanced Communications Ltd.