European Event-Driven Analyst

Patryk Basiewicz

PGB Research

Event-Driven

On 8 October, <a href="https://www.smartkarma.com/entities/cellnex-telecom-sau" target="_blank" data-smartkarma-citation="entities:21258:1" rel="noopener">Cellnex Telecom Sau (CLNX SM)</a> announced a major acquisition and also announced a rights issue with a dilution of c. 22.5% and proceeds of EUR2.5bn. Given that Cellnex has a varied capital structure, which includes bonds and convertibles, I am aware that clients are using complex strategies to profit from the situation.
These strategies require some comfort with Cellnex's fundamentals and quality of its business model. Below, I discuss Cellnex's fundamentals and provide evidence that indicates Cellnex is a very strong business. In fact, it is a unique investment proposition due to its strategy, competitive position and growth prospects. 
This insight can be also be seen as a Bottom-Up investment case for Cellnex.

On 8 October, Cellnex Telecom Sau (CLNX SM) announced a major acquisition and also announced a rights issue with a dilution of c. 22.5% and proceeds of EUR2.5bn. Given that Cellnex has a varied capital structure, which includes bonds and convertibles, I am aware that clients are using complex strategies to profit from the situation.
These strategies require some comfort with Cellnex's fundamentals and quality of its business model. Below, I discuss Cellnex's fundamentals and provide evidence that indicates Cellnex is a very strong business. In fact, it is a unique investment proposition due to its strategy, competitive position and growth prospects. 
This insight can be also be seen as a Bottom-Up investment case for Cellnex.

Cellnex (CLNX SM): Fundamental Briefing for Those Trading the Current Rights Issue

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New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
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US Healthcare
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We also provide debt research on:
Pan European Telecom Services and Cable

Thematic (Sector/Industry)

New Street Research attended this year's Mobile World Congress in Barcelona recently. While the move to 5G will bring huge increases in localized wireless capacity, the transition around 2020 to 5G looks increasingly likely to be smooth for many operators, with little impact on capex or revenue trajectories. 5G does not change the key economics of network densification. Where these are good, 5G will thrive. Where they are poor, 5G deployment will be slower. Only in markets with strong asymmetry…

New Street Research attended this year's Mobile World Congress in Barcelona recently. While the move to 5G will bring huge increases in localized wireless capacity, the transition around 2020 to 5G looks increasingly likely to be smooth for many operators, with little impact on capex or revenue trajectories. 5G does not change the key economics of network densification. Where these are good, 5G will thrive. Where they are poor, 5G deployment will be slower. Only in markets with strong asymmetry…

Report from Mobile World Congress: The Transition to 5G Comes into Focus.

After the disappointment of a failed merger in the UK, <a href="https://www.smartkarma.com/entities/132" target="_blank" data-smartkarma-citation="entities:132:1">CK Hutchison</a> and <a href="https://www.smartkarma.com/entities/14026" target="_blank" data-smartkarma-citation="entities:14026:1">VimpelCom</a>'s Wind subsidiary have been desperate to get a deal approved to merge in Italy. Arguably, there is even stronger motivation than in the UK as both face greater challenges as independent companies in Italy.  Hutchison is currently OpFCF negative in Italy and Wind has a heavy debt burden.  In the past week, <a href="https://www.smartkarma.com/entities/21486" target="_blank" data-smartkarma-citation="entities:21486:1">Iliad</a> has signed an agreement with CK Hutchison and VimpelCom to enter the Italian market as a prospective MNO…

After the disappointment of a failed merger in the UK, CK Hutchison and VimpelCom's Wind subsidiary have been desperate to get a deal approved to merge in Italy. Arguably, there is even stronger motivation than in the UK as both face greater challenges as independent companies in Italy.  Hutchison is currently OpFCF negative in Italy and Wind has a heavy debt burden.  In the past week, Iliad has signed an agreement with CK Hutchison and VimpelCom to enter the Italian market as a prospective MNO…

CK Hutchison. More Luck with Consolidation Plans in Italy?

Equity Bottom-Up

Five days after the surprise Brexit vote, much remains to be clarified in terms of future direction. If anything, the various political moves in the UK and the EU in recent days suggest we face a period of real uncertainty ahead. That said, as the fallout continues it is worth looking for investment opportunities.  We continue to review the market for dislocations in the telecoms sector as we believe a lot of the near-term movements have been predominantly driven by fund flow/ liquidity and…

Five days after the surprise Brexit vote, much remains to be clarified in terms of future direction. If anything, the various political moves in the UK and the EU in recent days suggest we face a period of real uncertainty ahead. That said, as the fallout continues it is worth looking for investment opportunities.  We continue to review the market for dislocations in the telecoms sector as we believe a lot of the near-term movements have been predominantly driven by fund flow/ liquidity and…

Post Brexit Fallout Continues: Looking for Opportunities in European Telcos?

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Fears of the impact of Britain's exit from the European Union have pushed down the prices of most European communication stocks. We think this is an overreaction as we view telecom as a sector somewhat immune to geopolitical changes. In our view, Brexit will have no effect on cross-border transfers of voice or data as mobile termination rates for voice have already been reduced to negligible levels and for data have been cut in half and will be down to local roaming rates by the end of 2017.Within the U.K., we think BT will likely be the most affected as the majority of its revenue is from the U.K. Its only non-U.K. revenue is from its global services division. However, we think what losses do accrue will be offset by stronger revenue from the global services division as revenue from other currencies is translated into a weaker pound.Analysts: Allan C. Nichols, CFA

Fears of the impact of Britain's exit from the European Union have pushed down the prices of most European communication stocks. We think this is an overreaction as we view telecom as a sector somewhat immune to geopolitical changes. In our view, Brexit will have no effect on cross-border transfers of voice or data as mobile termination rates for voice have already been reduced to negligible levels and for data have been cut in half and will be down to local roaming rates by the end of 2017.Within the U.K., we think BT will likely be the most affected as the majority of its revenue is from the U.K. Its only non-U.K. revenue is from its global services division. However, we think what losses do accrue will be offset by stronger revenue from the global services division as revenue from other currencies is translated into a weaker pound.Analysts: Allan C. Nichols, CFA

We Believe Brexit Fears Have Unfairly Driven Down Shares of Most European Communication Stocks

Italy

Infrastrutture Wireless Italiane S.p.A. operates in the sector of infrastructure for electronic communications. The Company focuses on the constructions of radio transmission infrastructure (towers, trellises and poles), telecommunications and distribution of television and radio signals.

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Infrastrutture Wireless Italia (INW IM)

Cellnex (CLNX SM): Fundamental Briefing for Those Trading the Current Rights Issue

On 8 October, Cellnex Telecom Sau (CLNX SM) announced a major acquisition and also announced a rights issue with a dilution of c. 22.5% and...

Patryk Basiewicz

Report from Mobile World Congress: The Transition to 5G Comes into Focus.

New Street Research attended this year's Mobile World Congress in Barcelona recently. While the move to 5G will bring huge increases in localized...

New Street Research

CK Hutchison. More Luck with Consolidation Plans in Italy?

After the disappointment of a failed merger in the UK, CK Hutchison and VimpelCom's Wind subsidiary have been desperate to get a deal approved to...

New Street Research

Post Brexit Fallout Continues: Looking for Opportunities in European Telcos?

Five days after the surprise Brexit vote, much remains to be clarified in terms of future direction. If anything, the various political moves in...

New Street Research

We Believe Brexit Fears Have Unfairly Driven Down Shares of Most European Communication Stocks

Fears of the impact of Britain's exit from the European Union have pushed down the prices of most European communication stocks. We think this is...

Morningstar, Inc.

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