Disappointing NeraTel gets a downgrade

SINGAPORE (Nov 10): UOB Kay Hian is downgrading Nera Telecommunications to “sell” with at target price of 58 cents after the group reported a loss in 3Q on falling margins and one-off forex losses.

In a Thursday report, analyst Edison Chen advises investors not to wait for the special dividend but instead get out of the stock to avoid the uncertainty than wait for the special dividend. That’s because orders have slowed and Chen is concerned about the margins for future projects.

Despite continuing strong demand from the infocomm business with order wins rising 68.6% to $23.6 million, NeraTel‘s telecom business has seen a sharp 63.7% drop in orders to $7.3 million.

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