GPacket is on track to roll out its WIMAX wireless broadband service within the next one or two month (go here for InsiderAsia's report on GPacket, which appeared on the EdgeDaily). In addition to the new WIMAX venture, GPacket is involved in the provision of seamless & unified platform for the delivery of user centric multimedia communication & services, regardless of the nature & availability of the backbone infrastructure. Its products & solutions are known as SONaccess, SONbuddy & SONmetro.
Its existing business has performed poorly for the past 4 quarters. GPacket is now riding on the recovery in its existing business operation & the successfully launch of its new WIMAX venture. Only time will tell whether GPacket can return to its glory days again.
Chartwise, the share price has been dropping since it broke its uptrend line at RM4.00 level in May 2007 (as noted here). Its recent low was RM2.06 was recorded in March this year. The current recovery seems to have brought the share price above its downtrend line. However, the break of the downtrend line does not mean that the share price of GPacket will commence on an uptrend anytime soon.
Chart: GPacket's weekly chart as at May 12, 2008 (courtesy of Quickcharts)
Based on the high risk involved in the new WIMAX venture & the uncertainties surrounding the recovery of its existing operation, I believe that investors would likely wait for a few quarters of results before buying into GPacket again. For now, one may take comfort that GPacket's downside risk is lower with the breakout above the downtrend line. GPacket is likely to trade in the range of RM2.00 to RM3.00 for sometime before a new trend appears.
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