Monday, October 18, 2010

Comments On The Budget

Much of what's there is already out there already, so nothing really new.

Oil & Gas - Uzma looked interesting on Friday, may be a big beneficiary for the small company.

Housing for first home buyers - OK, good move.

Public transportation - This will be a key mover and shaker.

PNB 100 storey tower, hmm ... sounds like over reaching here.

Finance - More prop traders, that is just institutionalizing what some heavy hitting stockists are already doing, whats new?

Khazanah and EPF getting PLUS is very good. It also paves the way to set a benchmark to acquire the other tollways. Litrak will be upgraded.

The two mega projects that could capture the most attention from investors would be the RM12bn high-speed rail project and the RM2.5bn WiMAX rollout. For leveraged exposure to WiMAX, YTL e-Solutions’ fee arrangement with YTL Power appears quite attractive. YTL Power will roll out WiMAX nationwide on 18 Nov.

It will provide free service to 400,000 university students for usage within their campus for a limited time. YTL e-Solutions will be paid an annual fee of RM75m and a 10% share of revenue above RM500m for its WiMAX licence. Fees will flow directly to the bottomline.

YTL Communications Sdn Bhd, which is gearing to launch its WiMAX-based services on Nov 18, is expected to sign an agreement with US-based Sezmi TV for a new personalized digital television content offering on its network. The agreement will give YTL Comms exclusive rights to offer hybrid TV services, comprising traditional TV, on-demand and Internet content to Malaysia and the Asian region. It may take YTL Comms a year to roll out the services in Malaysia. The overall cost of bringing digital TV on its network to TV screens and also extending services to the region may be whopping RM1b to RM2b.


Poon said...

Why is it that YTLPower will be launching Wimax and not YTLE ?

Poon said...

YTLE surged a lot in the past week. As an owner of a 4G licence with a low share price at RM1.48, would it be a wise investment to buy the shares of one of Tan Sri Francis Yeoh's listed companies ?

kl said...

You are too kind to the clowns who put together this pathetic patchwork of jumbled mishmash they call a national budget. It's more like a "fudget" ; fudge a little here, a little there, hoping no one notices the holes in it. Once again, another round of "Najibconics".

Malaysia said...

YTL Comms is a subsidary of YTL Power. YTL Comms needs the heavy cashflow from YTL Power to back its heavy investment.

Jason said...

I am existing YTL power shareholder. A bit disappointed with YTL Power on the lack of transparency on Wimax. So did a bit research on it:

1) YTL Communications is 60% owned by YTL Power and the remaining 40% was sold by YTLe to other party in June 2009 (never mentioned buyer of 40% in YTLe annual report and never announced to Bursa at all)

2)Y-Max Networks (holder of Wimax spectrum) is 60% owned by YTLe and remaining 40% must be owned by those "capable people up there"

3) Emailed to YTL Power Public relations over my disappointment because IF YTL power have to fork out ALL the money to the tune of RM1 billion so far, yet have to share so much with YTLe, no reply or confirmation yet from YTL on profit-sharing with YTLe.

4) I think the business model of YTL wimax will be very disruptive to exiting celcos. Imagine, for your moblie phone charges, you are charged not on per minute anymore, (I hate existing celcos charge me based on per 30-second block) but on per unit cost based on kilobyte or megabyte, just like your electricity, except the more you use, the cheaper unit cost will be. Anyware 100 hours talktime roughly equals to 1 GB, so talk is cheap then

5) However, the risks are interconnections as existing celcos such as Celcom and Digi have yet to provide interconnection even though agreement are signed. I mean, do you want your competitor easy time? The second risk is related to wimax handset as not many out there yet, even though the wimax ecosystem is quite mature compared with LTE. In fact YTL wimax will be the world first deployment with mobile voice and data over wimax. Initially, i think Mobile VOIP will be the killer app.

6) Based on existing celco ARPU of around RM55 and P1's ARPU of RM60, If YTL can get 4 millions users say after 3 years, the annual revenue will be RM55 ARPU X 4 millions x 12 months=RM2.64bil lions. Assuming 27% nett (Digi and Maxis have around 27% to 33% nett), this will translate to around RM740 millions per annum, not bad for an investment of RM2.5 billion.

So, after my own research, I am keeping YTL power instead of selling, the numbers look good.

bj-fernandez said...

Would you please give a layman's overview of the plus deal. They are buying out assets and liabilities and does this mean that current shareholders of plus will be paid back cash from this buyout.

As govt owns 67.5%, Wouldn't they have made an offer for shares, not already owned.

Pls clear the air...

Poon said...

Thank you, Jason. Appreciate your comments. Good luck in YTL Power.

The Emperor said...

PLUS share price was RM3.39 on 1/7/2010 and reached a high of RM4.46 on 14/10/10. A 31% spike.

KAM said...

Forget about wimax, just look at gpacket performance last two years.

Only 3 telcos can survive in our bolehland, ie MAXIS, DIGI & AXIATA.

U better trust me

KAM said...

Forget about wimax, just look at gpacket performance last two years.

Only 3 telcos can survive in our bolehland, ie MAXIS, DIGI & AXIATA.

U better trust me

solomon said...

Like the mooting of High Speed rail and dislike the 100 storey building.

But, what caught my attention is the eco tourism of Nexus Karambunai? I was thinking why not have 1Makan stall portal to introduce all the good food over here leh, but first can the Govt consider reducing the import duties for my wines?? Food without good wines a bit susah to attract Mat Salleh??

bOcy said...

last time i heard, wimax may not replace 2g/3g in the near future because its not as flexibility in terms of handing over between comm towers (more disconnections). 4th generation phones should address this issue, combining the advantages of both 2g/3g & wimax

Jason said...

Business model of P1 and YTL is different. P1 only has fixed/nomadic data + fixed voice that bring little value to consumers. How many needs fixed voice nowadays? So, the value really lies in mobile VOIP with YTL's 018. Wimax's low latency and QoS makes it easy for voice.

The question is not so much about technology with LTE or wimax. Existing carrier will go for LTE as it is compatible with 3G and greenfield operator such as YTL will go for wimax as wimax equipment is at least 4 times cheaper than LTE equipments today.

Both will co-exist just like GSM and CDMA with wimax especially more popular among developing countries as it is cheaper to deploy and LTE will be more popular in devekoped world. Don't forget, both are 100% IP and OFDMA based

brotherlone said...


1) YTL Communications is 60% owned by YTL Power and the remaining 40% was sold by YTLe to other party in June 2009 (never mentioned buyer of 40% in YTLe annual report and never announced to Bursa at all)

they are damn cheeky, the sale of the 40% was made one day before the end of their financial period, its in YTL-e annual report, but YTL Power show only a 60% interest in YTL Comms hoping no one will noticed it, RM400k for 4G license is blodoy cheap. where are the minorities for YTL e?

I'll stay away from YTL-P, cause of Wessex and depreciating pounds; there is also a ceiling to prices they can charge to consumers, it's also a function of capex

garry said...

Where can I find or buy a database of finance managers in Singapore and Malaysia?

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