re: NasdaqNM : SDAY - $3.50 (Sunday Communications)
what I like: huge BREAKOUT today and FUNDAMENTAL ATTRACTIVE VALUATION, positive operational developments, "China" play
This is the first wireless carrier stocks that I ever bought, really. The company, Sunday Communications' ADR's trade on the NASDAQ. The company as it's market is based and listed in HongKong which shoudl qualify it as a true-blue China play.
My expectations:
double digits, maybe high teens this year..
Short Description:
Sunday Comm's business is wireless voice and data services in HongKong. Core services are 2G and 2.5G GSM services. They recently added GPRS data (flat fee price!) and "IN" Intelligent Networking (Location based) offerings. Fundamentally they became cashflow positive in FY2002 and net profit positive this year (conveyed this in their most recent financial statements), yet still trade at a Price/Sales ratio of less than 0.7 - how many US carriers can claim this ? what is more, Debt/Equity is still very low for this business, around 1, while gross margins are very good, exceeding high 30ies..
Outlook:
While core revenue base is GSM & 2.5G data (GPRS) services, SDAY has a licence to introduce 3G services in HongKong. Especially for a densely populated area like this city should turn out to allow for a rather low-cost rollout scenario beyond 2004-2006 range.
Financial background:
around 30m ADR's outstanding, 12.6m is the float. Marketcap near $100m. annual sales at $170m. The comapny traded north of $30 historically.
Detailed Overview:
Sunday Communications Limited, incorporated in 1999, is a developer and provider of wireless communications and Internet services in Hong Kong. Sunday Communications began commercial operations with GSM (global standard for mobile) 1800 mobile telephone services in 1997, and has since added information data display, Internet service provision and wireless application protocol (WAP) to its range of lifestyle services.
Sunday Communications' core strategy is to capitalize on the convergence of wireless communications and Internet technologies to develop wireless applications and services targeted at consumers' lifestyles. The Company introduced wireless lifestyle services, such as movie information and ticket booking, music delivery, dating and banking services. In early 2000, sunday.com and SO WAP were launched to take advantage of new technologies, such as WAP and GPRS (general packet radio services), which allow high-speed and direct Internet access through wireless devices. The Company is focusing on developing and delivering 2.5G (GPRS) services.
The Company maintains shops and locations throughout Hong Kong and Kowloon. In addition, it offers shops in new territories, including in Fanling, Kwai Chung, Shatin, New Town Plaza, Sheung Shi, Taip Wai, Tain Shui Wai and Tsuen Wan, among other areas. Sunday Communications also maintains repair and maintenance locations in Mongkok, Wan Chai, Cheung Sha Wan, Causeway Bay, North Point and Kwun Tong.
Sunday Communications offers its mobile and network phone customers an array of service packages, such as short message services, value-added services, Sunday Specials, 1622 IDD and roaming services. Most services packages include features, such as call waiting, call hold, conference call, caller ID, call barring, call forwarding and voice mail, as well as secretarial services. Additionally, the Company offers other services, including alternate line, SO WAP and mobile data service bundle, and mobile fax and fax mail services. It also offers ancillary services, such as billing services and cancellation and reconnection services. To further enhance its services, Sunday Communications offers wireless products manufactured by such companies as Nokia, Motorola, Sony Ericsson, Ericsson, Siemans, NEC, Phillips, Alcatel and Samsung. |
