SINGAPORE (Aug 4): RHB and UOB KayHian are sticking to their “buy” calls for Nera Telecommunications (NeraTel) with target prices of 80 cents and 83.5 cents respectively, despite its lacklustre 1H16 results.

To recap, NeraTel’s telecom and network infrastructure businesses recorded revenue growth of 19.3% and 10.1% respectively. But revenue from its payment solutions business, which management has announced will be sold off by 3Q16, fell 52.1%. There was also a $1.8 million foreign exchange loss.

According to RHB’s Jarick Seet, group revenue would have risen 41.8% if the payment solutions business had been excluded. UOB KayHian’s analyst Edison Chen also noted that the foreign exchange losses were a “one-off” occurrence and earnings would have risen 15.4% to $4.5 million if those losses and a stock obsolescence write-down of $0.7 million were excluded.

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