SKT Sky Network Television Limited.

[tqtq]

Hey mate - happy to discuss the pros and cons of sky as a going concern - but the one area I try to avoid is predictions on SP movements.

I have no idea what the market will do in the short term and have no special insights in that regard.

Fortunately we don’t have to wait long for the AR - two weeks will fly by and then Mr Market will put us out of our misery by making an assessment and setting the price 😎

Sensible reply, thanks mistatea, yes the market will always go it’s own way, irrespective of where we think it should be, as demonstrated in recent months. Should be and interesting lead up to the annual report even before the presentation.

[tqtq]

1. 30c
2. See this page: https://en.wikipedia.org/wiki/List_o...aland_Exchange

1. Is pretty close to what other people are saying to I hope that’s the consensus
2. Hilarious.
Thanks Ogg.

[tqtq]

1. 30c
2. See this page: https://en.wikipedia.org/wiki/List_o...aland_Exchange

It’d really be awesome to hear mistatea and ogg’s and anyone else’s guesstimate of where the sp might be at:
1. Annual report time
2. End of year
3. Cure time (if there is one)
4. At Olympics time
Thanks

I’m not as sensible as some of the wise men in this blog, so here is my call, for what it’s worth (which is not much).
1. 29c
2. 38c
3. 70c
4. 55c
Disclaimer, just a complete guess, based upon nothing. Not advice. Dyor.

[Quantitative Easing]

I am back from the naughty corner now!

Who missed me?!

It was a hard week without Bhagwaan. Welcome back sir.

[Quantitative Easing]

1. 30c
2. See this page: https://en.wikipedia.org/wiki/List_o...aland_Exchange

Ah yes i remember Opus being bought out by WSP. Share price was trading under $1 at the time and WSP offered $1.92. This will be far bigger in terms of % gain.

[tqtq]

1. 30c
2. See this page: https://en.wikipedia.org/wiki/List_o...aland_Exchange

Ah yes i remember Opus being bought out by WSP. Share price was trading under $1 at the time and WSP offered $1.92. This will be far bigger in terms of % gain.

I hope the % return is similar to Black Crane Captial’s return on their Chorus investment.

[mistaTea]

It was a hard week without Bhagwaan. Welcome back sir.

Thank you my child.

Tum mera sabse accha beta hai.

I bless you with the ability to own a portion of Sky TV NZ - a business that , on the balance of probabilities, will be worth more in the future than the market says it is today.

[Quantitative Easing]

Thank you my child.

Tum mera sabse accha beta hai.

Lol what does that say? It's cool if you do speak hindi though. It is piaoliang as the chinese would say.

I've been trying to learn mandarin and hindi myself. I know that beta means child and tum means you and mera= me.

[mistaTea]

Lol what does that say? It's cool if you do speak hindi though. It is piaoliang as the chinese would say.

I've been trying to learn mandarin and hindi myself. I know that beta means child and tum means you and mera= me.

Beta means son (bacca is child). Mera means my. The closest word to me is ‘mai’ I think.

Anyway, I said that you are my best/favourite son 😎

[Ferg]

under valued it may be but by what metric?

I'm grappling with this share and I too can't can't see the metric by which it is under-valued. I WANT to get into it but in following everyone's instruction (to DYOR) I'm struggling to see the value.

I'm projecting (i.e. guessing) NTA of around 7c per share so there is no easy win on that basis. I'm forecasting (i.e wild guessing) NPAT and FCF of around 2c-3c per share for FY20 and FY21. Assuming dividends resume at 1c per share ($18m cash cost to SKT) then a value of 25c implies a no growth discount rate of 4% which feels low for the risk inherent in this share. Even if SKT managed a dividend of 2c in FY22 then a share price of 30c implies a no growth discount rate of around 7% - again this feels low plus investors have to wait 2 years. EPS of 3c with a PE of 8-10 implies a share price of 24-30c - so it could be undervalued on that basis but I still can't see where the growth is coming from.

Why am I assessing this as risky which deserves a high discount rate and no growth for dividend valuation purposes?

• Satellite revenues are falling and being replaced by online subscribers at the rate of 20-25c per $1 lost which is resulting in a falling top line (I know I'm stating the obvious).
• I believe certain costs like transmission will be relatively fixed with annual CPI ratchets so they will be hard to reduce in line with the fall in revenues, unless the new CEO has been busy in this area already.
• Overseas programme commitments involve deep pockets and big balls - SKT has a wall of content coming at them (e.g. the last IR had content purchases of $161m but only $138m was amortised). Trying to turn around the cost of fixed content contracts is like trying to turn the QE2. It will be hard to reduce the content costs without having them languish on the Balance Sheet resulting in future impairments. Future programme commitments per the IR over the next 5 years total $890m, without taking into account non-contract purchases.
• Lastly, the fixed assets are heavily aged - the last AR had historical cost of $930m, a book value of $163 and annual depreciation of $71m - I reckon future investment will likely be needed unless SKT can release cash from their Mt Wellington site (I assume they still own this?)
• In conclusion, historical EBITDA and NPAT are long gone not to be seen again. Hence the share price reset.

As I said, I would like to get into this but it feels like a gamble rather than a risk-free investment with little to no prospects for organic growth.

Disclosure: interested observer and wannabe SKT investor but not currently a holder. Financial experience with a broadcaster.