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Singapore “Flyer” Of The Week: Nera Telecommunications

Nera LogoThis week’s Singapore “Flyer” is small-cap telecom outfit Nera telecommunications (SGX: N01). The company caught the attention of the market following a broker report that suggested it might benefit from the recent telecom licence auction in Myanmar, even though Nera did not win a licence.

It seems that Nera has done business with Telenor and Ooredoo in the past. Both the Norwegian multinational and the Qatari telecom companies were granted licences in the auction. The licences will kick in from September when the two companies will be expected to provide Myanmar with up to 75% telecom coverage within five years.

The broker reckons that the rapid build-out of telecom services could see either or both companies subcontract the work to third parties that could include Nera.

There is no guarantee that Nera will be an automatic shoo-in for the contacts. However, the market seems to think otherwise, which sent the shares up 15% this week to S$0.725.

Nera has over the last four years, delivered reasonable revenue and respectable income growth. Revenues have risen 12% from S$160m to S$179m. Meanwhile, profits have almost doubled from S$10m to S$19m. What’s more, dividends have jumped from S$0.03 to $0.08.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.