Yoma Strategic Holdings:
STI : 3,188.76
Price Target : S$ 1.02
Yoma consortium is Myanmar's first telecom tower companies
•Signed agreement to develop and lease telecom towers to Ooredoo Myanmar; JV will lease to multiple tenants subsequently
•This development is positive and fast-paced, earnings accretion likely to be in 2015 onwards
•Yoma would need to raise fund for this venture but we believe its stake would not be substantial
•Maintain Buy, TP S$1.02
Yoma announced that its telecom JV with Digicel and FMI named Digicel Asian Holdings, has signed an agreement with Ooredoo Myanmar, one of the winners of Myanmar's telco operating licence, to develop, construct and lease telecom towers to the latter. This joint venture will be amongst the first telecoms tower companies to begin construction in Myanmar and will accept multi-tenancy agreements.
This development is in line with Yoma's aspiration to be a conglomerate and we believe it will contribute positively to the company in the long haul although the accretion may be insignificant. Yoma has not released any quantifiable details at this stage. But, Yoma would surely need funding to invest in this JV although we believe their stake would not be substantial. Based on Myanmar government's timeline to expand mobile penetration from less than 5% to 80% by 2015-2016, we believe this would be a fast-paced development and should start no later than 2014. That said, we do not expect immediate profits in its first year of operations considering start up expenses.
We expect further update on this JV over the next few weeks and will update accordingly.
Maintain Buy on Yoma with TP of S$1.02.
Publish date: 03/12/13