Hong Kong-listed Comba Telecom closes SGX debut at S$0.255, roughly on par with HK shares

TELECOMS solutions provider Comba Telecom joined the list of secondary issuers on the mainboard of the Singapore Exchange (SGX) on Wednesday (Jan 4), with its first trade taking place at 11.52 am at S$0.41. It closed at S$0.255 after 202,200 shares changed hands.

The company’s Hong Kong counter, which is included in the Hang Seng Composite Small Cap Index, had opened flat at HK$1.38 on Wednesday. It closed at HK$1.41, up 2.2 per cent or HK$0.03, after 5.6 million shares were traded.

The company has not engaged in any equity fundraising activities in Singapore as part of the secondary listing.

Comba provides equipment and services such as base station antennas and subsystems, wireless access and wireless transmission. It also has research and development (R&D) centres in both China and the US.

In an interview with The Business Times, its senior vice-president Huo Xinru said Singapore was chosen for a secondary listing because the company is familiar with the country. Its office here serves the Asia-Pacific and has grown from four people in 2003 to 25 people now.

The company has supplied and installed wireless infrastructure in numerous places, ranging from Singapore’s train network to malls such as Changi Airport’s Jewel.

“We understand the Singapore market and also how the Singapore government works; that gives us very good confidence,” Huo said.

She added that Asia will be a big area of focus for Comba. India, which concluded its 5G spectrum auction in August last year, will be of particular interest.

As China reopens, the company is expecting to book higher revenue from the resumption of 5G base station deployments as well.

Chief financial officer Ken Chang said 2.2 million outdoor 5G base stations have been deployed; its 4G base stations number more than five million. Comba has a market share of about a quarter in China and hopes to get a similar share for 5G base station installations.

A boost from 5G deployments may help the company get back on its feet. Comba has had some choppy years, recording losses in 2018, 2020 and 2021. The company posted its largest loss of HK$592.6 million (S$101.5 million) in 2021.

Chang attributed this to a slowdown in 5G deployment due to the Covid-19 pandemic.

For the first six months of 2022, however, the company posted a net profit of HK$90.4 million, reversing a loss of HK$89.4 million in the same period a year ago.

“Growth was rekindled back in the middle of last year, where the Chinese telcos really started to focus on their 5G deployments again,” he said, adding that there could be an additional one million outdoor 5G base stations being built “quite soon”.

Comba has diversified to serve telcos and equipment manufacturers in more countries. For the six months ended 2022, 29 per cent of revenue was from countries other than mainland China.

Huo added that the company aims to remain competitive by improving productivity and the use of automation at its factories. It also invests in research and development (R&D) to enhance its products for customers - for example, by improving its energy efficiency.

Energy efficiency is especially important because the frequencies allocated to 5G tend to be relatively high. This means they propagate over a smaller area.

“We either… make the whole network system more efficient so that we can compensate for the degradation of the frequencies, or we put in more base stations,” she said.

Huo added that Comba has to strike a balance between short-term and long-term R&D projects, which could yield results in a year, or between three and five years, respectively.