Transcription of Finance News Network with Enice Holding Company Limited (ASX:ENC) Non-Executive Director, Ross Benson Carolyn Herbert: Enice Holding Company Limited
(ASX:ENC) is a vertically integrated wireless telecommunications company, specialising in China’s rapidly growing telecommunications sector. I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the company’s Non-Executive Director, Ross Benson. Ross, welcome back.
Ross Benson: Thank you Carolyn.
Carolyn Herbert: Can you start by giving us an introduction to Enice?
Ross Benson: Well as you said it’s a vertically integrated wireless telecommunications company. The business has four key operating areas. The first one is engineering services, which is really the heritage in the original business that was started in 2000. We have a wireless and RF product, which is really focused on predominantly DAS antenna technology. And thirdly, we have an advanced solutions division, which is really focused on developing disruptive technologies, in the area of network optimisation management.
Carolyn Herbert: What do you see as the key drivers of the business in China and globally?
Ross Benson: The key drivers in China are actually the same as the global drivers, behind a wireless technology. In China, the adaption rate behind wireless devices proliferation of mobile devices, just means that the demand for data in China is greater than in any other country, in the world. An Ericsson Report forecast the data growth alone from China is expected to exceed 44 per cent CAGR, for the next five years.
Carolyn Herbert: What’s the company’s client base in China and the market for its key products?
Ross Benson: So the main clients in China are the major telcos. So you have China Mobile, China Telecom and China Unicom. And fourthly the China Tower Company, which is really an aggregation of the three major telcos, for the infrastructure spend in China. The addressable market in China over the next five-years, obviously is in the order of billions. But as I’ve said, the phenomenon for data and the demand for data is the same in China, as it is globally.
Carolyn Herbert: You were recently awarded contracts with China Mobile and Hubei Mobile. Can you tell us a little bit more about these deals?
Ross Benson: We actually made some recent announcements regarding these contracts, because this really endorses the poignancy of our technology, particularly in the DAS antenna space. So in actual fact in one of those cases, we won 17 per cent of the total tender. And it really just endorses the fact that these antennas are world-leading technology. In our case our DAS antennas have what we call, the lowest PIM-rating in the world. And that simply means the level of noise that is existent in the pipe that the data flows down, as we know spectrum is very limited. So these types of technologies and in Enice’s case, the DASA antenna technology, is a very sharp tool to win these tenders.
Carolyn Herbert: Now to financials, can you provide us with a snapshot of the company?
Ross Benson: So for the December ‘15 year, we’ll do approximately $AUD85 million revenue. The GP is approximately 23 per cent, our EBIT margin is approximately 15, and our NPAT margin is approximately 10. So expect that for the December ‘15 year, we’ll see an NPAT of around about $AUD8.5 million. And at the moment, based on our market cap of $72 million, that equates to a PE of sub eight.
Carolyn Herbert: Finally Ross, what’s your focus for the company for the next 12 months?
Ross Benson: The main focus for the ’16 year is firstly regional expansion. Secondly we will initiate international sales, because we’re finding that our technology, particularly in the antenna space, is very attractive to some of the global telecommunication companies. And thirdly, we expect to do a market launch of some of our disruptive technologies, in the network optimisation and management area.
Carolyn Herbert: Ross Benson, thanks for the update on Enice.
Ross Benson: My pleasure Carolyn.
Ends
