Strong EBITDA growth in the Nordics

Organic Q3 EBITDA grew strongly by 7% yoy, which was comfortably better than expected. In the Nordics the group now looks able to achieve c.6% EBITDA growth in the coming quarters. Furthermore, coupled with a capex decline, Telenor is entering a virtuous circle. Telenor has also received dividends from CelcomDigi showing that the merger in Malaysia is already dividend neutral. Telenor’s dividend yield stands above the average of its best-in-class peers (4.5/5%) at 8.2%. We maintain our Buy on

Mid-single-digit Nordic annual EBITDA growth story for the future

Q2 revenues (+3% yoy) were in line with our expectations but the EBITDA (up by 4% yoy) is no longer lagging revenue growth – something which had been the case owing to the increase in energy costs. Telenor’s secure dividend yield still stands undeservedly well above the average of its best-in-class peers at 7.5%. We maintain our strong Buy on the stock.

An Asian deconsolidation which will underpin the dividend

Q1 revenues (+4% yoy) were in line with our expectations as was the EBITDA, (up by only 2% yoy and still lagging revenue growth due to the increase in energy costs). The main point regarding Telenor is that, with the completion of the mergers in Thailand and Malaysia, dtac and Digi are now de-consolidated. Telenor’s secure dividend yield still stands undeservedly above the average of its best-in-class peers at 7.5%. We maintain our Add on the stock.

10% plus dividend yield and buyback potential make Telenor a buy

The outlook for 2022 finally remains unchanged as the significant increase in energy prices weighing on the EBITDA (a 3% impact) was offset in Q3 by a positive one-time effect in Pakistan. We are not expecting a dividend increase for 2022 but neither should there be a dividend cut. So with a current dividend yield of 10.3% and a share buyback representing 2/2.5% of the market cap it is now clearly time to buy Telenor.

A very secure and high dividend yield.

Telcos have had 2 difficult months in the stock market as, despite being considered defensive, their dividend yields have proven too… low in this period of rising rates. Telenor will neither increase (nor decrease) its dividend for 2022 but should proceed with a 2% share buyback. With a 9.5% dividend yield and this share buyback program it’s now time to take another look at telcos like Telenor which seem to be offering a very secure and high dividend yield.

It will take time before Asia recovers thanks to M&A

The group still expects EBITDA growth to lag revenue growth for a few quarters while, in Asia, the outlook for 2022 remains uncertain. Short term, with zero EBITDA growth and with capex still at a high level, a dividend increase for 2022 should not be expected. We maintain our Buy opinion because things could improve greatly in future in Asia with the major deals announced over the past year.

Prepare beforehand for a strong recovery in Asia?

The Q1 was slightly disappointing with revenues up by only 0.5% yoy and lfl while the EBITDA was down by 2.5%. Although the group still remains affected by the drop in tourism in Asia and particularly in Thailand, 2022 could be better than the poor outlook suggests but above all 2023 should be a year of solid growth. And, given the solid expansion via the mergers expected in Asia over the coming years, we maintain our Buy on the stock.

The poor 2022 outlook should not hide Telenors's future strengthening in Asia

Although Q4 revenues were in line with expectations, EBITDA was however disappointing. In 2022, EBITDA should be around the 2021 level or slightly higher: this guidance is more cautious than expected. Although the group still remains affected by the pandemic and the drop in tourism in Asia, 2022 could be better than the poor outlook suggests. And, given the solid expansion in Asia expected over the coming years, we believe that buying Telenor today offers a good risk reward.

An agreement to combine DTAC and True in Thailand

Telenor has agreed with Charoen Pokphand Group to explore the combination of Telenor’s DTAC and True in Thailand. The new company could have c.55m mobile customers and revenues of c.€6bn. This deal should allow Telenor to strengthen its position in Thailand, a country where mobile activities should experience strong growth in 2022-23 if the recovery in tourism is there. However, Thailand is a three-player market and the deal could be stopped by the regulator. We maintain our opinion at Buy.

2022 is shaping up well

Quite a solid performance for the group in Q2 with revenues and EBITDA up respectively by 3.3% and 3.6% yoy and lfl. The stock has just recovered from its pre-COVID-19 level and we maintain our positive stance on Telenor. The group still remains affected by the pandemic and the drop in tourism in Asia but 2022 is taking a good shape (with also the sale of the Myanmar activities and a merger with Axiata in Malaysia).

Myanmar and Asia burden Q1 performance

Q1 performance was globally in line with expectations and quite similar to those of the two previous quarters excluding Myanmar whose overall situation remains difficult. The business continues, however, to be impacted by the COVID-19 pandemic, in particular in Asia and through the reduction in roaming revenues. We maintain our Buy on the stock.

Opex savings in the Nordics compensate for a still challenging Asia

Like in the previous quarters, the good news is that the revenue decline due to a continued roaming shortfall, in particular in Asia, was more than compensated by an opex reduction of 7%, resulting in a flat EBITDA. The stock is still down by 12.5% compared to its pre-COVID-19 level, while the dividend is rising by 3%. We maintain our opinion at Buy on the stock.

Telenor Norway with 5G FWA + other news

Launches a 5G version of FWA (broadband) – no impact on estimates M&A speculation in Europe: Vodaphone and Masmovil (once again) Recent EU ruling on 02/Hutchinson a catalyst for European consolidation?

Swedish spectrum auction delayed

The awaited Swedish spectrum auction today is delayed The authority is reviewing the validity of the Huawei restriction 1H/21 auctions in Scandinavia likely not material, Asia main uncertainty

5G auctions in focus & Telia Norway changes

Telia announces an unlimited subscription – following Telenor Norway Spectrum auctions in Sweden next week: do not expect it to be material 1H/21 auctions in Norway/Denmark likely not material, Asia uncertainty Capacity increased through both spectrum and increased efficiency on 5G

CyanConnode (CYAN LN) - FY24 update: revenue materially ahead

CyanConnode exceeded FY24 revenue expectations and has high visibility into FY25, supported by strong deliveries and a growing backlog respectively.

CyanConnode (CYAN LN) - The smart choice

CyanConnode provides end-to-end communications platforms that connect Internet of Things (IoT) devices such as smart meters to a utility's billing system. The company is a global player and a market leader in India, where a new government scheme, as set out below, has mandated the procurement of 250m meters by March 2025, a significant market opportunity for CyanConnode.

Hybridan Research: Sector Review: Artificial intelligence in UK cybersecurity: the human uplift 17/04/2024

Artificial intelligence (AI) is a double-edged sword in cybersecurity. Whilst new AI models, architectures, and innovations are emerging to protect the security posture of organisations, attackers are also benefiting from deepfakes, sophisticated phishing, and automation of malicious codes. To ensure the impact of AI on cybersecurity to be a net-positive, we need to pit good AI against bad AI. Point solutions enhanced with machine learning: Global cybersecurity has been built with point soluti

PROGRESSIVE: Gamma Communications: More happy returns

Gamma’s results for the year ended 31 December are in line with the expectations confirmed in the January trading update. Revenue of £521.7m is 8% ahead of FY22, with gross profit at £267.2m showing the same progress. Adjusted EBITDA grew by 9% and PBT by 10%, although the impact of higher tax rates was seen in the 5% increase in adjusted EPS. Cash generation was strong once again, with 108% adjusted cash conversion. Year-end cash of £134.8m is £42.3m above the year before, even after the £30.5m

Cyanconnode (CYAN): Smart meter breadth and depth

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

CyanConnode (CYAN LN) - Large Letter of Award for Omnimesh Cellular Modules

CyanConnode has received a large Letter of Award (LOA) for Omnimesh Cellular Modules (CNICs) from a Thai customer.

BATM+ (BVC, House Stock at 19p) - Cyber, a quantum perspective - Cyber, a quantum perspective

Morning Note – 21 December 2023

CyanConnode (CYAN LN) - H1 FY24: On track

CyanConnode’s H1 results position the company to meet our full year forecasts. The company does not need to grow revenue yoy in H2 in order to meet full year estimates. The Indian smart metering programme appears on track, with 98m smart meters already awarded to prime bidders and these orders should soon filter down to competitively well positioned subcontractors such as CyanConnode. These market drivers position the company well to grow revenue 39% in FY24 and 111% in FY25 and for a £1.9m of o

Hybridan Small Cap Feast - 18 Mar 24

18th March 2024 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

CyanConnode (CYAN LN) - FY23 results: Solid outlook

Revenue grew 23% in FY23 with limited contribution from Indian RDSS contracts

MTI Wireless Edge+ (MWE, House Stock at 46p) - US$1.2m antenna contract win

Filtronic - Expecting 10% pa compound revenue growth to FY24

As revealed in last week’s interim update, strong demand continued through 1H23 and into 2H23, fuelled by demand for backhaul modules in the ongoing 5G rollout, newly won defence contracts and a post-COVID recovery in critical coms. This led to solid +5% yoy growth in 1H revenue and a current record order book of £17m – a full year’s worth of business for the group. The update also revealed that shortages and the resulting price hikes on specific components led to FTC delaying some 2H23 producti

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Filtronic - H1/24 Riding the EM-waves across land, sea and space

Filtronic has reported results in-line with management expectations for H1/24, and now expects to perform ahead of our forecasts for FY24E and FY25E in terms of revenue and profit. We are raising our revenue forecasts for FY24E and FY25E by 14.6% and 6.2% respectively, and our EBITDA forecasts by 85.2% and 28.0% respectively. The increase in expectation is driven by a strong recent acceleration in order flow, including a £7.8m order announced today. In this report we present a detailed review of