Friday, October 20, 2006

Sounds Like Singapore's New Name For Their Country

A few weeks back I did mention Nextnation as an upcoming stock. The trouble with these stocks is that we don't know the timing of the play. This morning session, Nextnation charged up the volume chart, could be interesting.

Mobile application service provider Nextnation saw its revenues and profits rise in the first quarter ended 31 July 2006. Consolidated revenues totalled MYR 23.5 million, up from MYR 15.2 million in the year-ago quarter. Profit from operations amounted to MYR 5.3 million, up from MYR 4.1 million last year. Net profit rose to MYR 4.8 million, compared with MYR 3.8 million in Q1 1005. Revenues in Malaysia totalled MYR 18.3 million with a net profit of MYR 5.3 million. Revenues from other countries stood at MYR 8.4 million with a net loss of MYR 502,430. The company has credible operations and strategy into India and China.

Recently, NextNation CommunicationBhd has signed a memorandum of understanding (MOU) with Saudi Arabia's Tawasul Telecom Co LLC to collaborate in research, development and theprovision of Internet and wireless technologies and value-added services. The MOU would enable NextNation to penetrate the fast-growing wireless value-added services market and related industries in the Middle East inline with its plan to diversify and grow its revenue base. Tawasul Telecom is involved in the provision of telecommunication, internet and mobile value-added services in the Middle East.

The most interesting bit is the company's involvement in mobile gaming. The company and Indosat Tbk have launched a mobile gaming community, the first in Indonesia, for Indosat's 15 million subscribers. Called "GameWar", the concept enables mobile games to be played as ac ommunity in Indonesia and it is expected to significantly change the mobile gaming landscape in one of the fastest mobile telecommunicationmarkets in the Asia Pacific. The partnership with Indosat, is through its subsidiary Ozura Sdn Bhd, via its Indonesian subsidiary PT Nextnation Prisma. Next up will be deployment in Thailand,Singapore and China. Ozura has developed and aggregated an extensive game catalogues anddistribution network worldwide, representing over 2,000 game titles to over 30 countries.

Meanwhile, analysts expect NextNation's net profit and sales to rise by 23 per cent and 33 per cent respectively in its current financial yeardue to rapid growth. NextNation has recorded a compounded annual growth rate of 382.1 percent for revenue and 258.4 per cent for net profit from 2004 to 2006. The company, which offers a one-stop mobile and wireless solutions to the corporate and consumer markets, also specialises in making software that allows the download of multimedia content like songs on mobilephones. Research houses that follow the company estimated NextNation's revenue to hit RM80-90 million in its current financial year ending April 30 2007, and rise to RM100-120 million in 2008, while net profit should come in at RM18-25 million and RM23-27 million respectively.

So far so good, no bad apples yet and at current price, the market capitalisation is undemanding still, around RM163m.

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