Comtech Korea(039980): Synergy from M&A expected to be great
- M&A issue
- Reiterate BUY. TP at KRW7,550
> Comtech Korea, a digital broadcasting system provider, acquired AP Technology, a Trunked Radio System(TRS) provider.
> The wireless telecommunication market is forecast to grow to KRW1tn within next 5 years, and Comtech Korea will be the biggest beneficiary of it.
> AP Technology's main customers are government agencies.
> AP Technology’s RP surprisingly surged 160% y/y to KRW1.7bn in FY05, and 1H06 RP came in at KRW2.8bn much higher than that of full FY05.
> AP Technology’s strong performance will boost Comtech Korea’s(the acquirer) earnings. |
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