Most analysts had a Neutral rating in May, following company’s 1Q10 results, citing possible margin compression in subsequent quarters...
Net proceeds from SinoTel’s rights are to be used for expanding its business of providing telcoms services to end-users, M&A and other capex. However we are ambivalent about SinoTel’s move downstream, as there could be significant execution risks involved. In particular, mgt has not explained how the risk/ rewards are to be shared in the partnership btwn SinoTel and its Telco partner in this new business…
Nevertheless, we note that rights holders would be subscribing to the shares at a slight 1ct discount to the mother share. Ie. The combined $0.055 ask price of the rights & $0.28 rights issue price works out to $0.335 in total. This compares with the $0.345 bid price of the mother share.
No comments:
Post a Comment