Relentless sell down, page-70

As a previous holder of VOC, I am mystified as to why their price is collapsing.

Looked up GS report from August - and see 12 mth target price of $8.90.

One wonders whether Teoh is playing both sides of the buy/sell spread with his holding, to drive the price down - but what for?

Vocus Communications Ltd. (VOC.AX): FY16 result in-line; Solid operational trends, Investing for growth
23 Aug 2016 at 2:44pm AEDT
What's changed
VOC reported an in-line result with FY16 sales/EBITDA/NPAT of A$831mn/A$215.6mn/A$101.7mn, -0.6%/-0.4%/+1.1% vs. GSe. Final DPS of 8.0¢ was ahead of GSe of 6.1¢. We make minor revisions to our EPS estimates (excludes the proposed acquisition of Nextgen) to reflect modestly higher operational forecasts offset by higher investment.
Implications
Solid underlying growth: Excluding M&A/one-offs (e.g. AMM) we estimate: (1) continued strong VOC core revenue growth of +c.20% in 2H16; but (2) moderating growth in the M2 domestic business with 2H16 +c.4% compared with 1H16 +c.7%. We believe this reflects softer FY15 sub trends and weaker revenue trends in M2’s business segment.
Improving operational trends in 2H16: VOC’s operational performance was solid: (1) continued strong growth in on-net buildings which we believe is a lead indicator of corporate revenue growth; (2) improving fixed broadband net adds across both AU and NZ. Despite this, consumer churn worsened, with VOC expecting to complete churn reduction initiatives by the end of 2016 (e.g. migration of high bandwidth customer on-net).
Further investment in FY17: We estimate VOC will invest an incremental A$15-17mn in opex in FY17: (1) +100 consumer staff; (2) +35 corporate sales staff (+50 in FY16); (3) A$6-7mn in marketing. VOC will also invest increased capex/opex to transform its IT systems to improve customer experience and productivity. In our view, rising investment is indicative of the increasing cost to acquire/retain customers as the NBN ramps up.

Valuation
Our 12m TP (average DCF, EV/EBIT) rises to A$8.90 (was A$8.40) as we roll forward our base year to FY18E. VOC trades on a FY17E P/E of 21.4X, c.12% discount to TPM. Retain Neutral.
Key risks
(+) Higher than expected market share wins & synergies, M&A. (-) Competition, integration risk, lower than expected synergies.
INVESTMENT LIST MEMBERSHIP: Neutral
COVERAGE VIEW: NEUTRAL