SAFARICOM: POST IPO

With the release of their results safaricoms jury is out. As anticipated the company continues to return unprecedentedly high profits and has managed to remain perched at the top of the most profitable company in East and central Africa.
With a PBT profit of about 20B and an PAT profit of 13.8B giving it an earning of 0.345Ksh considering that their issued shares stand at 40B. This means that the company will in a weeks time enter the NSE at PE ratio of 14.5 at least for the local investor segment. With their growth potential the stock enters as among the cheapest within the commercial and services segment at NSE
Though their subscriber growth rate appears to be flattening and future new customers expected to have lower Average Revenue per User[ARPU], their new services continue to baffle many. In the month of March alone 3billion was transferred through their MPESA service. They have also embarked on an aggressive campaign to capture a significant market share in the Internet business through their broadband modem router.
In essence what this mans is that safaricom is combining services provided by, banking, mobile telephony and ICT all rolled into one. Given the growth potential of all these sectors safaricom appears like it will be one company to watch carefully.
In the mobile telephony though they anticipate strong competition, their competitors have one heck of a job to do to really cause a dent to Safaricoms client base. With amounts of money already invested in their infrastructure not forgetting the numbers of their clients locked by their MPESA product, it will take more than the price war Celtel has embarked to acquire a significant chunk from Safaricom. AS for the expected entrant ECONET, they will need more than a miracle to cause any nightmares to safaricom given the head start Safaricom has alreday given them
A down turn in our pre IPO expectation is that the company has indicated that they will pay dividends to their current share holders which excludes you and me i.e the Government, Vodafone and by extension regrettably Mobitelea. However the silver lining in this cloud being that they are getting a lower dividend, 2B down from the 4B they got last year so the withheld profit will go into making Safaricom earn us more money next year.
I am assuming a very bullish position in this stock and will buy it at even 15ksh once it hits the bourse