Sector: Telecomunication | Growth stock
We are currently holding this stock, note that as recently listed company, there is not enough data to apply BGS 20 Strategy KPI’s and we are buying this stock due its favorable growth prospect and our desire of exposure in the sector.
Aussie Broadband is a telecommunications services and products provider, one of the most highly rated ISPs in Australia. Its services include nbn services and mobile services.
ABB’s nbn services include personal nbn, seniors nbn, gamers nbn, nbn modems, nbn phone and entertainment. Its mobile services include mobile phone and mobile broadband.
The company also offers private Internet protocol (IP) networks, managed service provider (MSP) partner program, hosted firewall, hosted private branch exchange (PBX) phones, session initiation protocol (SIP) trunks and carbon portal. The Company operate a national multiprotocol label switching (MPLS) network with its own infrastructure in selected areas and links to Internet exchange points in Singapore and the United States. It also provides services Australia through its wholesale partners. The Company provides services for personal, small business and enterprise customers.
The company has presented strong financial growth in its last earning report.
✅ Revenue up 89% to $157.4m ($83.4m 1H20)
✅ Although the net profit has decreased the company’s EBITDA up 87% to $7.3m ($3.9m 1H20)
✅ The company also has been showing strong organic connection growth with residential broadband up 30% and business broadband up 49% since June 2020.
The company’s growth plan consists exploiting the following:
• Marketing spend will be accelerated for the remainder of the
year to take advantage of opportunities as they present
• Additional focus on bundling with new campaigns to target
existing customers towards multiple products
• Using nbn focus on fast campaign to further target growth
into 100 Mbps and above tiers
• Adding further pre sales engineering functions to target
customers with more complex needs
• Business specific marketing now operating at scale and
providing strong lead generation
• Business sales call centre increased and achieving good
• Focus now shifting from onboarding MSPs into scaling up
order volume from existing MSPs.
• Continued platform development with mobiles the next
product to be added into the platform.
• Fibre build now operating at scale with over 150km currently under construction
• Builds are now underway in Victoria, New South Wales and Western Australia
• Queensland and South Australia presently in final design.
• Exploring partnerships to reduce the need to construct redundancy paths and
access regional POIs not originally contemplated in the initial project design
• Pipeline of direct fibre customer orders building with signed orders ahead
• Next phase of network expansion underway to take the company past
the present 500,000 connection design
• Presently assessing vendors and design pathways to support
1 million connection
We bought (Asx: ABB) in 22 February
Target to sell $3.5
Weight on Portfolio: 10%
Lead time: 3 months
Strategy: BG Trading
Stop loss: 15% from the buying price.
*Note that taking or not a stop loss is to everyone’s discretion and we strong suggest to use if you need to protect capital and cannot afford turmoil in the stock price.
Disclaimer: Note that although we have been investing in the Australian Stock Exchange and other markets over 10 years, anything you read within this group is NOT financial advise; it is general information only and we strong recommend to consult a financial adviser before making any investment decision that could have significative impact on your wealth*