# BGL - BigAir Group



## yogi-in-oz (6 April 2006)

Hi folks,

Firstly, some general thoughts on trading IPOs, but 
please note, this is  NOT ADVICE, simply a discussion
and some time cycle analysis for BGL, listing tomorrow.

..... see file, attached below.

happy days

  yogi

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## xinyu09 (26 February 2010)

I just finished reading  the report on this company, and bought a bit of the shares.

Imo, it's an exciting company and chart looks good. Increased volumes recently, it looks like someone is accumulating.


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## xinyu09 (18 March 2010)

Interesting things happening at the moment, maybe the stock gets a re-rating to the 20s. I hope I am not dreaming


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## BigLeon (29 April 2011)

Hey folks BGL obviously aren't getting a lot of airplay here on Aussie Stock Forums but they have just announced a 30% upgrade to earnings guidance for FY11, from $4m to $5.2m.

They are the clear leader in their niche and I expect their growth to continue.

Some of the key points about BigAir's business


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## So_Cynical (29 April 2011)

BigLeon said:


> Hey folks BGL obviously aren't getting a lot of airplay here on Aussie Stock Forums but they have just announced a 30% upgrade to earnings guidance for FY11, from $4m to $5.2m.
> 
> They are the clear leader in their niche and I expect their growth to continue.
> 
> Some of the key points about BigAir's business




Leon i would appreciate it if you kept your thoughts about BGL to your self until after June 30 so i can free up some capital and get me a position.


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## kingcarmleo (2 May 2011)

Have been watching these guys very closely. Unfortunately the share price is still pretty stagnant. Will look for an entry level below 16c


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## skc (2 May 2011)

BigLeon said:


> Hey folks BGL obviously aren't getting a lot of airplay here on Aussie Stock Forums but they have just announced a 30% upgrade to earnings guidance for FY11, from $4m to $5.2m.
> 
> They are the clear leader in their niche and I expect their growth to continue.
> 
> Some of the key points about BigAir's business




Just to clarify the guidance refers to EBITDA, not NPAT.

My NPAT guesstimate would be ~$2.3m so ~1.5c EPS, and PE ~12.5. Relatively cheap compared to IIN and TPM.


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## FrontRunner (23 May 2011)

up 22% today...

no announcements? Any thoughts on this? Large trading volume


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## VSntchr (23 May 2011)

FrontRunner said:


> up 22% today...
> 
> no announcements? Any thoughts on this? Large trading volume




One of Roger Montgomerys bloggers gave it a big spin..and so the bunch of "ill do whatever you say"ers are buying in droves...
they really are not value investors...


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## FrontRunner (23 May 2011)

do you have a link to the blog entry?

Just quickly how did you find this entry? I did a google search for BGL posts this morning which turned up with nothing of significance, hence my post here. 

If I had known I would have placed a market sell, instead I place a limit order that didn't hit market.


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## Risk Chaser (23 May 2011)

here's the post i think VSntchr was refering to, hard to imagine people would buy based on this.




> Hi Roger and Everyone,
> 
> First of all I would like to apologize for being secretive in the last few weeks. The reason is I have found several interesting opportunities! In this post I will talk about one of them which is presenting huge value. For those of you who remember, this is not my mystery company I have mentioned before – it’s actually BETTER!
> 
> ...


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## FrontRunner (23 May 2011)

Thanks RC.

Hard to imagine that would have instigated this mornings rally, considering this will be the highest trading volume day for BGL. Somethings missing here. Maybe institutional block trade..

Sp has settled at 25 cents


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## titus (23 May 2011)

It doesn't look like the RM blog herd drove the price up today.  The poster on the blog posted the comment at around 11.53am.  At that time the price was already around 24.5c after coming off a 27c high.  It was more to do I think from the Eureka Report from last Friday.


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## VSntchr (24 May 2011)

titus said:


> It doesn't look like the RM blog herd drove the price up today.  The poster on the blog posted the comment at around 11.53am.  At that time the price was already around 24.5c after coming off a 27c high.  It was more to do I think from the Eureka Report from last Friday.




I read his post before the market opened yesterday, so I dont think that is correct...

Your right though, it was also mentioned in the eureka report which would have had an effect...15,000 subscribers means illiquid stocks will get impacted!


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## tinhat (24 May 2011)

Mentioned here:
http://www.eurekareport.com.au/iis/iis.nsf/ak/AKmcDG?opendocument


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## titus (24 May 2011)

VSntchr said:


> I read his post before the market opened yesterday, so I dont think that is correct...
> 
> Your right though, it was also mentioned in the eureka report which would have had an effect...15,000 subscribers means illiquid stocks will get impacted!




Ah yes, I had the dates wrong.  This company looks promising but I want to do a heck of lot more investigating before I commit.


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## Intrinsic Value (25 May 2011)

titus said:


> Ah yes, I had the dates wrong.  This company looks promising but I want to do a heck of lot more investigating before I commit.




I took a look at Big Air after reading about it on Eureka but it is still too early in my opinion to make an informed decision.

It could do well but without any history and being so small I would prefer to wait.

I would rather lower the risk and take less profit than jump in too early.


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## VSntchr (25 May 2011)

Intrinsic Value said:


> I took a look at Big Air after reading about it on Eureka but it is still too early in my opinion to make an informed decision.
> 
> It could do well but without any history and being so small I would prefer to wait.
> 
> I would rather lower the risk and take less profit than jump in too early.




Yeah agreed. I cant see how people are forecasting it to earn 3-4mil next year. Revenue is up 60% this half but profit only up 1%???

This full year profit probably wont exceed last year by much assuming that trend continues...so for FY12 to be 3-4mil would imply an increase in NPAT of minimum 100%...its a big call to base you investment on that....

I can't see the logic for so many people jumping in and paying any old price on Monday when there really is many companies offering just as much in such a risk v reward play...


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## Intrinsic Value (25 May 2011)

VSntchr said:


> Yeah agreed. I cant see how people are forecasting it to earn 3-4mil next year. Revenue is up 60% this half but profit only up 1%???
> 
> This full year profit probably wont exceed last year by much assuming that trend continues...so for FY12 to be 3-4mil would imply an increase in NPAT of minimum 100%...its a big call to base you investment on that....
> 
> I can't see the logic for so many people jumping in and paying any old price on Monday when there really is many companies offering just as much in such a risk v reward play...




Just to add a bit of fuel to the fire on this one and this is a quote from RM from his blog

"Less liquid than ZGL…A Eureka report article helped too perhaps. Only one analyst covering the stock. I believe that analyst may own 7% of the company."


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## FrontRunner (14 June 2011)

up a further 13% this morning due to a positive Macquarie review:

https://www.macquarie.com.au/edge/article/SECTOR/50/d45e6ca233f70310VgnVCM100000c502890aRCRD/


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## FrontRunner (14 June 2011)

actually they just announced this:

"Response to speculation in the media

BigAir Group Limited (“BigAir”) takes note of the “Vocus has BigAir in its sights” article published in the Australian Financial Review on 14 June 2011.

BigAir confirms that it has to date not received a formal offer or takeover proposal. BigAir will keep its shareholders informed as and when developments occur."


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## McLovin (14 June 2011)

Is there any real moat around BGL's business? The cost of building a network is quite small. 20 odd base-stations at $100k each and they have Sydney covered. It doesn't seem like something incredibly difficult to replicate. IMO this is a classic case of a company that will see any competitive advantage eaten away as it grows to any sort of size.

Will Telstra's 4G network be a competitive threat to BGL, or are they targeting two different segments (mobile v fixed wifi).


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## Intrinsic Value (1 July 2011)

Very interesting article in todays SMH about BGL.

The share price has risen over 50 percent since I first looked at it a month or so ago.

Over on RMs blog there are a couple of bloggers very keen on it.

IV for next year of 40c currently trading at 31.5cents. Good management team and good track record with other businesses. Very small cap stock only 45m but with plenty of potential.


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## InvisbleInvestor (1 July 2011)

Intrinsic Value said:


> Very interesting article in todays SMH about BGL.
> 
> The share price has risen over 50 percent since I first looked at it a month or so ago.
> 
> ...




Agreed. Too bad the MOS has been gobbled up by the fact the value has caught up with the price in such a short time.


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## Intrinsic Value (4 July 2011)

InvisbleInvestor said:


> Agreed. Too bad the MOS has been gobbled up by the fact the value has caught up with the price in such a short time.




Up nearly 10 percent this morning presumably off the back of the SMH article.


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## VSntchr (13 July 2011)

BGL dropping quite heavily this week. These illiquid stocks are so volatile, any articles or reports out that could be causing the move?


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## robusta (13 July 2011)

VSntchr said:


> BGL dropping quite heavily this week. These illiquid stocks are so volatile, any articles or reports out that could be causing the move?




No idea but BGL definately on my watch list


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## zac (13 July 2011)

While they certainly have dropped in price; from my calculations they are still trading well above their value.
I have them valued under 20 cents.

Also who are their main competitors?


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## VSntchr (13 July 2011)

zac said:


> While they certainly have dropped in price; from my calculations they are still trading well above their value.
> I have them valued under 20 cents.
> 
> Also who are their main competitors?




They operate fixed wireless networks, Id be very careful that Telstra doesnt become a major competitor...thats what has kept me out thus far..

As for value..I think its worth closer to 30c than 20c...rising fast too.


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## Intrinsic Value (14 July 2011)

VSntchr said:


> They operate fixed wireless networks, Id be very careful that Telstra doesnt become a major competitor...thats what has kept me out thus far..
> 
> As for value..I think its worth closer to 30c than 20c...rising fast too.




RM put out his valuation on his blog for BGL for 2012 at 37c.

It has been touted that more likely BGL is a take over target for the likes of Vocus.


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## ROE (14 July 2011)

Telstra post NBN will be very heavy on wireless and they already has
the best wireless network ..

with the money coming in from NBN payment they can invest a billion or so
and build un-rival wireless network and rival to NBN offering ...

basing valuation on return on equity on these business is risky
as the future return on equity is not certain .

Invest with care


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## McLovin (20 July 2011)

VSntchr said:


> They operate fixed wireless networks, Id be very careful that Telstra doesnt become a major competitor...thats what has kept me out thus far..




Telstra could trample all over BGL without even knowing. This is a tiny company, with easily assets that are easily replicated. I believe their ROE is a function of their size, not a competitive advantage.


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## BigLeon (21 December 2011)

Hey guys

Just wanted to highlight a couple of the reasons why I don't believe Telstra is a threat to BGL's niche.

1. While Wimax is a wirelessly delivered technology, it is designed for fixed connections rather than mobile.  4G/LTE is for mobile users, and even at peak download rates of 100-150mbps downstream, Bigair can do 1gbps symmetrical as a business-grade service. (BGL is business customers only, and sells almost solely through the wholesale channel)

2. There is more money in mobile compared to Wimax but a much bigger investment is required.  Telstra are better off pumping the money into their mobile network (one of the reasons they are rolling out LTE is to take load off Next G).

Happy to answer any questions about Bigair's place in the Business Telecoms market.


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## McLovin (22 December 2011)

BigLeon said:


> Hey guys
> 
> Just wanted to highlight a couple of the reasons why I don't believe Telstra is a threat to BGL's niche.
> 
> 1. While Wimax is a wirelessly delivered technology, it is designed for fixed connections rather than mobile.  4G/LTE is for mobile users, and even at peak download rates of 100-150mbps downstream, Bigair can do 1gbps symmetrical as a business-grade service. (BGL is business customers only, and sells almost solely through the wholesale channel)




Isn't it being sold as a redundancy service rather than a primary internet connection? My question would be if it is a redundancy service how many businesses, without their own dedicated T1 line, would require 1gb up/down speed in an emergency? Further to that question, what happens if the network in say the CBD goes down, surely BGL's service will also go down, wouldn't it?

If they are planning on creating an alternative everyday network, what are the spectrum/bandwidth limitations? By that I mean how much can you physically transmit over a given amount of spectrum and how much spectrum is available or will become available (I think I read somewhere that analog TV spectrum will become available once it's switched off).

Finally, is it possible that Telstra/Optus/the other guy (Vodafone) could at some point begin building WiMax networks in the CBD's of the capital cities to handle some of the traffic from their 4G network? I know at the moment smartphones aren't equipped for WiMax but surely within 18 months this will be standard, given the lower capital cost of building WiMax networks.

It's an interesting sector and one I try and follow. To me though, technology is changing too fast to be able to make sense of where it will be in 2/5/10 years. The only thing that I do know for sure is that the amount of data transferred will continue to grow exponentially and that cable will remain the primary method for transporting that data, with the exception of the last mile.


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## BigLeon (22 December 2011)

McLovin said:


> Isn't it being sold as a redundancy service rather than a primary internet connection? My question would be if it is a redundancy service how many businesses, without their own dedicated T1 line, would require 1gb up/down speed in an emergency? Further to that question, what happens if the network in say the CBD goes down, surely BGL's service will also go down, wouldn't it?




It can be used as a primary, not just for internet but VPN as well and it does QoS (prioritisation of traffic for business applications, video, voice etc).  In terms of a network going down, it all depends on where Bigair is getting their backhaul transmission.  In major disaster scenarios the main issue is power rather than network survivability, as in CBD areas you will have 6 or more different fibre networks operated by different carriers (just look at the footpath in major cities, the plates designate pits owned by Telstra, Optus, Uecomm, AAPT, Pipe, etc).  A business buying BigAir services for network survivability would ensure their fibre connection was carried on a different transmission network to Bigair.  Of course, when it comes to access network, you can put a backhoe through the building's fibre conduit and their Wimax service will continue to operate.  And nobody uses E1's any more for data, it's all about IP with MPLS core 



McLovin said:


> If they are planning on creating an alternative everyday network, what are the spectrum/bandwidth limitations? By that I mean how much can you physically transmit over a given amount of spectrum and how much spectrum is available or will become available (I think I read somewhere that analog TV spectrum will become available once it's switched off).




Every spectrum has limitations, according to BigAir's FAQ their spectrum is 30-50 times that available for the mobile networks.  This indicates to me if they run out of spectrum this will be a good problem to have.  I don't know what the spectrum availability is for the frequencies they use but if it's full IEEE will likely designate other spectrum bands for Wimax in the future.

It is likely that the 700MHz analogue spectrum will be recycled for LTE (Optus is testing LTE on 700 now).



McLovin said:


> Finally, is it possible that Telstra/Optus/the other guy (Vodafone) could at some point begin building WiMax networks in the CBD's of the capital cities to handle some of the traffic from their 4G network? I know at the moment smartphones aren't equipped for WiMax but surely within 18 months this will be standard, given the lower capital cost of building WiMax networks.




Wimax isn't really a mobile-friendly service, it is more to deliver fixed connections as line of sight is generally required and as far as I know cell handoffs don't really work (also, to guarantee service you would need to control who connects to which towers).  It would make sense for carriers to continue investing in 4G, and building a Wimax network to target the current business market of $15m doesn't sound like a very focused investment 



McLovin said:


> It's an interesting sector and one I try and follow. To me though, technology is changing too fast to be able to make sense of where it will be in 2/5/10 years. The only thing that I do know for sure is that the amount of data transferred will continue to grow exponentially and that cable will remain the primary method for transporting that data, with the exception of the last mile.




Agreed, Wimax is a last mile technology which services the gaps fibre has as an access network:
Expensive = $20k+ for a leadin generally and $100+ per metre
Susceptible to backhoes etc
Weeks vs Hours to deliver


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## McLovin (26 December 2011)

Thanks BigLeon.

From reading what you wrote I'm still slightly confused as to what their competitive advantage is. They're essentially providing what is currently provided by cable through microwave. As long as they stay relatively small it's unlikely the big boys will bother competing (as I said in an earlier post, I think their RoE is due to their size not a moat). But how scaleable is the business? If their model is significantly less CAPEX intensive than cabling the last mile and data integrity/speed is as safe then surely competition will eat away at their business if it becomes successful, they are afterall providing a commodity.


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## BigLeon (29 December 2011)

McLovin said:


> Thanks BigLeon.
> 
> From reading what you wrote I'm still slightly confused as to what their competitive advantage is. They're essentially providing what is currently provided by cable through microwave. As long as they stay relatively small it's unlikely the big boys will bother competing (as I said in an earlier post, I think their RoE is due to their size not a moat). But how scaleable is the business? If their model is significantly less CAPEX intensive than cabling the last mile and data integrity/speed is as safe then surely competition will eat away at their business if it becomes successful, they are afterall providing a commodity.




I guess time will tell whether BGL faces serious competition in the future, but the barrier to entry for another provider to compete with them looks too risky for me - with an existing supplier doing a decent job, if I was a telco startup I'd become an NBN RSP and building value-added media/application services to differentiate.  A base station costs about $250k.

They may be providing a commodity in wireless access network however in a commodity market the lowest price operator wins.  Since CVA were merged into BGL an equivalent national wimax operator is yet to emerge.

I think given BGL's 50%+ revenue CAGR their growth isn't showing immediate signs of slowing, the beauty of telecoms industry is once you pay for your big fixed cost base everything else is money for jam - you can selectively invest where you see profit opportunity.  Even if they didn't turn on a single new customer from today you have a business returning $850k EBITDA every month ($10.2m per annum)... for $45m with no debt.

I am a true believer, but time will tell whether I am mistaken


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## BigLeon (20 February 2012)

BigLeon said:


> I guess time will tell whether BGL faces serious competition in the future, but the barrier to entry for another provider to compete with them looks too risky for me - with an existing supplier doing a decent job, if I was a telco startup I'd become an NBN RSP and building value-added media/application services to differentiate.  A base station costs about $250k.
> 
> They may be providing a commodity in wireless access network however in a commodity market the lowest price operator wins.  Since CVA were merged into BGL an equivalent national wimax operator is yet to emerge.
> 
> ...




Excellent result today, while capex is peaking the business is still roaring ahead at the speed of electromagnetic wave propagation in free space 

Link to my analysis here

I'm anticipating a full year EBITDA of $10.5M-$11M, given their current run rate, future synergies, and HY12's result of $4.57M   Forecast of $9M?  They'll smash that 

Tracking well for maiden dividend


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## Intrinsic Value (20 February 2012)

BigLeon said:


> Excellent result today, while capex is peaking the business is still roaring ahead at the speed of electromagnetic wave propagation in free space
> 
> Link to my analysis here
> 
> ...




Good to see. I got in at 30cents awhile back and am happy to hold. This looks like it is going to go very well.


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## Intrinsic Value (24 September 2012)

BGL tracking very nicely indeed.

Small dividend being paid.

Share price up a bit as well.

The best performer of my portfolio over the last year.

Bought in at just under 30c and now sitting just under 50c.


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## VSntchr (24 September 2012)

Intrinsic Value said:


> BGL tracking very nicely indeed.
> 
> Small dividend being paid.
> 
> ...





Yeah it has been going well, I just took profits as I feel its fully valued. But I did very will with it, in not too long a time either 
Still got a divvy on the way tho 

Looking to get back in if it goes below 40c..


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## Intrinsic Value (2 October 2012)

VSntchr said:


> Yeah it has been going well, I just took profits as I feel its fully valued. But I did very will with it, in not too long a time either
> Still got a divvy on the way tho
> 
> Looking to get back in if it goes below 40c..




It looks like it is heading the other way. Hit 59c today and I am wondering whether i should sell or not.


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## VSntchr (2 October 2012)

Intrinsic Value said:


> It looks like it is heading the other way. Hit 59c today and I am wondering whether i should sell or not.




Yeah I missed quite a bit of profit by selling 2 weeks too early...I needed the money for another opportunity though...guess sometimes thats the way it goes.

Im wondering if an announcement is on the way?


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## Intrinsic Value (2 October 2012)

VSntchr said:


> Yeah I missed quite a bit of profit by selling 2 weeks too early...I needed the money for another opportunity though...guess sometimes thats the way it goes.
> 
> Im wondering if an announcement is on the way?




Might be as it is unusual for th share price to spike so much ex dividend.

If it hits 60 i am selling. 

Should have sold out FGE when it hit highs earlier this year need to learn from past errors even thou i think it is a good long term buy.


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## Intrinsic Value (14 December 2012)

Intrinsic Value said:


> Might be as it is unusual for th share price to spike so much ex dividend.
> 
> If it hits 60 i am selling.
> 
> Should have sold out FGE when it hit highs earlier this year need to learn from past errors even thou i think it is a good long term buy.




I said i was going to sell at 60 cents but it hit 61 today and I cant bring myself to sell.

I still think this one has more potential. I am going to wait til i see half yearly results.


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## dazed321 (20 February 2013)

Anyone got any ideas for the 8% drop yesterday ?
I'm a newbie and been following this one for a while, I dont seem to be able to get much info on bgl.
Any ideas or tips would be be greatly appreciated.

Thanks have a nice day


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## skc (20 February 2013)

dazed321 said:


> Anyone got any ideas for the 8% drop yesterday ?
> I'm a newbie and been following this one for a while, I dont seem to be able to get much info on bgl.
> Any ideas or tips would be be greatly appreciated.
> 
> Thanks have a nice day




Have you looked and analysed their half year report from yesterday?

http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=BGL


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## Intrinsic Value (21 August 2013)

BGL still looking good. Nice investor presentation focussed on retaining shareholder value.

Results encouraging. Share price 69c. Was going to sell at 60c but still holding.


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## mr. jeff (22 August 2013)

Yes has moved very well.
I like the chart and I note large volume yesterday followed by low volume down day. Sitting at all time high territory which may slow it down - I would expect to see an upthrust on an upday followed by a retest of the high. If there remains strength then a continuation up. 

Watching.


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## VSntchr (19 February 2014)

Just had a look at BGL for the first time in a while.
The Annitel acquisition is quite big and will represent about ~33% of revenues!

The operating margins on Annitel are only about 16% which is much lower than BGL has previously been achieving - however they do expect to increase this margin after integrating the business and utilising cross sell opportunities.

BGL continues to grow organically as well as through acquisitions...ensuring that value is being added for shareholders through the growth phase.

BGL is positioning itself as an infrastructure owner so it will be interesting to see the improvement in FCF once the investment phase starts to wind down. The risk to this is that a change in consumer requirements reduces their demand (e.g. NewSat's satellites??).

I see some value in this one but there is a few questions to get your head around first...


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## jigjigwhip (27 May 2014)

hey guys, interested to see your opinions on BigAir vs Telstra. 

As Telstra has announced there rolling out a national wireless network for 2015, which would be in direct competition with BigAir's wifi broadband. BigAir, with still solid FA and TA, show good signs of future growth, yet the ominiscent plans of Telstra pose certain risks that could be detrimental to growth.

any ideas guys??


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## merlin06 (13 September 2016)

*BGL....offer by SLC.*

I have BGL shares. An announcement referring to some sort of take over by SLC was made after closing. It's confusing. 
Can someone put it in plain English and advise me as to my best course of action?


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## System (5 January 2017)

On December 22nd, 2016, BigAir Group Limited (BGL) was removed from the ASX's official list in accordance with Listing Rule 17.11, following the implementation of the scheme of arrangement by which Superloop Limited acquired all of the issued shares in the Company other than those already held by Superloop.


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