See how Yoma Strategic Holdings benefits from Ooredoo Myanmar deal

"Scope for attractive return," says OCBC.

Yoma reported that its consortium, Digicel Asian Holdings, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Myanmar, which OCBC Investment Research views as a providing the scope for an attractive return on invested capital for the consortium.

Digicel Asian Holdings is comprised of Digicel Group, First Myanmar Investment Co., Ltd and Yoma Strategic Holdings Ltd,

Here's the complete analysis from OCBC:

Agreement with Ooredoo. Yoma reported that its consortium, Digicel Asian Holdings, comprising Digicel Group, First Myanmar Investment Co., Ltd and Yoma Strategic Holdings Ltd, has signed an agreement with Ooredoo Myanmar to develop, construct and lease telecommunications towers in Myanmar. We understand from management that detailed terms regarding ownership and capital outlay for the consortium are still being negotiated and will be announced in due time. Digicel Asian Holdings’ company in Myanmar, Myanmar Tower Company, will construct multitenancy towers in Myanmar and aim to work with multiple telecommunications operating companies, including Ooredoo’s to facilitate its commitment to rapidly achieve coverage across the country after winning a coveted license earlier this year.

Attractive business opportunity. We believe this business provides the scope for an attractive return on invested capital for the consortium. To recap, Myanmar authorities awarded in June this year two telecommunications licenses to Norway’s Telenor and Qatar’s Ooredoo. As part of the reported requirements, winners of the tender must launch their services within nine months of the licence being granted and install a network to cover a quarter of the country within a year, and three-quarters within five years. Given that this is a mostly green-field project in an undeveloped country, we believe that it makes tremendous sense for both telecommunication players, and for the local telecommunication companies as well, to outsource the build-out and share resources to manage costs and gain strategic synergies.

Soon to get more color for Landmark site. Now that it is less than a month away from the long-stop deadline for the Landmark site acquisition, we believe that the group will soon provide more color regarding the site. While another extension of the long-stop deadline appears possible at this time, which may be a temporary speed-bump for the share price, we continue to see good odds that the group will ultimately acquire the site successfully. Maintain HOLD with an unchanged fair value estimate of S$0.84.