mTouche

Below are the recommedation and valuation from Kenanga on mTouche:

The Group is targeting 1.0m-subscriber base (less than 1% of Japan’s mobile phone population) at a subscription charge of around USD3/user/month, which is in line with the market’s average mobile value-added service fee. That will translate into a revenue of USD3.0m per month should the target be achieved. In a recent meeting, MTB’s management hinted that the group would focus on expanding organically and consolidating its existing operations. Until M-Bit and the push of mobile value added services in new markets and interactive TV ventures abroad prove themselves, we are maintaining our FY07 and FY08 earnings forecasts.
As such, we are maintaining our HOLD-rating on MTB with a revised 12-month target price of RM1.99 (-2.9% from RM2.05 earlier), which is based on industry average FY07 P/E of 7.0x. Limited earnings visibility remains our biggest concern going forward.

Looks like mTouche has to depend heavily on their new software 'M-Bit Network' for greater future earnings. M-Bit is the first global P2P Search and File Super-Distribution network that allows the sharing of content files between mobile phones via transmission over wireless mobile networks.

I am not sure about the mobile phone users at Japan. In my opinions, this is not going to work at local market. Our market is not yet developed until such a lavel where we need to rely on this type of network to transfer our contents.

'Uncertainty' is the best word to describe mTouche at this moment ...