HTA 3.33% 14.5¢ hutchison telecommunications (australia) limited

Grant, page-2

  1. 4,941 Posts.
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    Hi GP,

    I intend posting some new commenatry on HTA and the telco scene in general, next week.


    JB WERE:

    For starters, the regular 500k buyer in HTA is JB Were which so far has picked up greater than 60% of the shares traded so far during April.

    Currently, JB Were's holding is approximating (assuming no net sales) 7 - 8 million shares, having picked up 2.3m shares in the first 2 weeks of March, and a further 2.8m shares in the first 2 weeks of April, plus a further 1.0+m since last week. Back in February, JB Were also picked up a swag of shares in HTA.

    Currently, JB Were rates HTA a "hold" valuing the business @45c (again, based solely on the CDMA business side of things).


    FUND RAISING:

    The $600m convertible note fundraising which is being underwritten by Hutchison Whampoa has some interesting conditions attached.

    The coupon rate is 5.5%, and the conversion rate is @60% premium to the VWAP during mid-May. The c-notes, however, will not be automatically convertible into ordinary shares at the end of 5 years. They can be redeemed for face value. In addition, a pro-rata conversion option will apply throughout the next 5-years (ie: based on the 12m anniversary of the issue date).

    In addition to this, HTA has raised a further $200m through the ANZ Bank.

    Also, the remaining $150m in equity commitments from TEL are being accelerated to June this year. Originally, the 2nd tranche commitment from TEL was not due until after commercial launch of H3GA's 3G network.

    Something brewing here, perhaps????


    OVERSEAS DEVELOPMENTS:

    Hutchison Whampoa (HWL) has forward sold much of its Vodafone and Deutsche Telekom holdings for a strong profit. Some of last year's provisions, therefore, will be written back to profits during the current half.

    HWL is also now well on schedule to commercially launching 3G in the UK in mid-September, with Italy and sweden to follow shortly after. Austria is now slated for late October, whilst the Australian launch will occur on time in October, but remains subject to when the Government formally releases the 3G spectrum.


    LOCAL 3G DEVELOPMENTS:

    A trial network is up and running in Sydney and testing is occurring on a regular basis.

    Base stations are now being rolled out on a rapid scale, and the OneTel site acquisitions are starting to take on their intended shape.

    Formal control of the OneTel sites (including ongoing lease payment obligations) passes to HTA at the end of April.


    THE WORLD OF 3G:

    HTA has a new web site with a 3G web presentation.

    The URL for this is:
    http://www.orange.net.au/

    Locally and globally, Hutchison is working on a wide range of 3G applications which will cover off against the personal, entertainment, business, sporting, finance, and commercial aspects of our daily lives.


    AUSTRALIA'S 3G ARRANGEMENTS:

    HTA will launch 3G into commercial service during October this year.

    Optus, however, has now delayed its 3G launch out to late 2003, early 2004, to co-incide with when SingTel introduces 3G into service in Singapore.

    Telstra has delayed its 3G launch until 2004 and will not now bring anything forward until well after T3 has been concluded.

    Vodafone is now unlikely to consider 3G in Australia unless it is part of a shared network arrangement.

    Telecom NZ's 3G aspirations (locally and in NZ) are tied up with HTA.

    TEL also has an MVNO arrangement in place with Vodafone for its 2G customer base.

    Further polarisation of the industry around the differing technology styles, therefore, is likely over the remainder of 2002, with HTA leading the way with 3G, Optus making inroards into Telstra and Vodafone on 2G (or GSM), Vodafone losing market focus and market share on 2G, Telstra being caught in the crosshairs of everyday politics, and CDMA proving a strong growth catalyst for HTA.

    More detailed commentary, on this and more, next week.

    SHORT-TERM:

    HTA share price to further stabilise in the mid-40s before increasing back up to the mid- high 50s by end May.

    TLS share price to drop below $5.00 and stabilise around $4.80 -$4.90 by month's end.

    SGT share price to remain depressed around the $1.60 mark until at least June /July.

    Vodafone share price to remain under pressure in the UK with a 85p possibility by month's end dependent upon the nature /extent of the goodwill writedowns that Vodafone is likely to announce in late May.
 
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