Our analyst attended the TechKnow show yesterday in Sydney and has provided his opinions on the first 13 of the 19 ASX-Listed Companies that presented. The remaining 6 will be available very soon so tune in!
1. Mobecom (MBM)
Company that has 5 services with flagship product being the “airBux” – loyalty program/app that signs on Companies that can offer users coupons, discounts, advertising. Users can use airBux to purchase products (transaction revenues)
Recent capital raising at $0.20 for $5.11M for a re-list on the ASX
Could potentially be adopted in the future as an exciting play, but currently too early and would like to see adoption rate / growth in future reports. Yes, the idea seems to be taken up by Companies, but I can’t figure out how much they would be making and would like to see written-down numbers instead of speculating
Gross profit $1.25M
Net Assets -$3.76M
MCAP @ $0.35 ~$57M
2. Inabox (IAB)
Only provider in Australia with an end to end (IT, Cloud, Telco) turnkey solution for large corporates to become a telco. Essentially offers large corporates a whitelabel telco product to offer to their own customers. They also provide general telco/cloud services to Companies.
Solid business that’s growing and had a weak FY17 due to large investment in their platform, development of their cloud-based products, and 2 acquisitions – Hostworks and Logic Communications.
High barriers to entry and they have the infrastructure in place now for growth in FY18. Only concern is the high debt which all profits will likely be used to pay down the balance over time. Good to know the operations are cash flow positive FY17 was +$4.2M. Funnily enough they managed to pay a dividend in FY17 of 1.7c after a strong FY16
NPAT $86K (FY16 NPAT was $859K, FY17 Underlying EBITDA was $6.1M vs FY16 EBITDA of $5.5M)
Debt $14M of $24M facilities used
Net Assets $14.7M
MCAP @ $0.95 ~$20M
3. Gooroo Ventures (GOO)
AI-based algorithm that can analyse potential employees before recruitment. Saves on costs associated with recruitment.
Given negative NPAT, the big questions is, are revenues growing strongly enough, and what sort of clients have they signed to date. Having only had just started pushing their service to the market (U.S. from Jan 2017, sales leader appointed May 2017), they’ve been signing heaps of new clients, notably KPMG, Kinetic IT, Randstad. Whole bunch more and an alliance with Microsoft (learning partner of microsoft to offer targeted learning and career development opportunities to Gooroo’s growing community of tech professionals)
Still early and worth a punt if speculating revenue will grow exponentially, but another report to confirm numbers would be ideal as we want to see the growth momentum.
Net Assets $3.5M
MCAP @ $0.13 ~$8M
4. Dreamscape Networks (DN8)
RTO’ed in December 2016, acquiring Pandora Enterprise Holdings – Ultimate parent of Dreamscape
Owner of CrazyDomains (#1 market share @ 30%) and in FY17, acquired a Singaporean equivalent – Net Logistics Pty Ltd who own Vodian, #3 in market share
Acquisitions of Pandora ($16.1M) pushed their NPAT to negative, but businesses are cashflow positive (+$12.1M). The underlying business showed these figures
Not the fastest growing business, but at +$1M cashflow / month, they are looking to grow inorganically in SEA mainly given high growth and fastest growing internet markets are in SEA. Received an acquisition funding facility from “a major aussie bank” for $20M (3yrs cash advance). Strong position to drive inorganic growth. I would say this is watchlist material, and we’d need to see further growth numbers.
Net Assets -$6.9M
MCAP @ $0.24 ~$83M
5. MSM Corporation International (MSM)
We know the story, but other extra points to note were:
– expecting to raise money again at some point to boost growth
– foundations are all set (ie. capex) and just need to pump operations
– still not sure exactly how they will be making money, but from my perspective there are 2 they can aim to achieve for FY18: after growing their audience more, they can generate advertising revenue / freemium business model + selling the data from the behavioural aspects of the audience.
– Dion made a comparison of MSM to Twitch.tv (a gaming version of MSM, but more like youtube than america’s got talent in the sense that there is no winning), which was sold for ~$800M but is valued now at $2.5B
– Impressive numbers of audience attraction to date (but that might be early-stage hype and not sustainable figures to base assumptions from)
Overall still risky, but it is definitely exciting to sit on the sidelines and watch
6. Sky & Space Global (SAS)
So we all remember this story, shooting nano-satellites into space to allow connectivity in the equatorial regions of the world.
So far, they’ve sent 3 satellites and are aiming for 200 over the next 4 years.
Too early and need to see real numbers before deciding. But another crazy exciting story that could potentially be a multi-bagger if successfully carried out.
Revenue $54.4M (from interest)
Net Assets $14.9M
MCAP @ $0.24 ~$83M
7. Titomic (TTT)
Weird business but sounds somewhat interesting – in the 3D Printing space. Their technology differs in the sense that traditional 3d printing requires a block of material which the lasers cut away, ie. subtractive process. Titomic’s tech uses a spraying machine that sprays eg. titanium, at such force that it creates the object – additive. Saves a heap on costs apparently, their metal powder is a tenth of the market average, and build speed is 10x faster than market.
U.S. and Chinese patens have been granted and they have a heap of clients in the pipeline that operate in these industries: sporting goods, aerospace and martime.
Based on their peer analysis in page 16 of their presentation
, their machine can make the biggest objects, meters-cubed-wise.
Too early at this stage to justify their market cap considering they don’t have any actual signed contracts to date. They will get some revenue from prototypes but still watchlist material to see if they will have momentum.
Revenue $6.8K (from interest)
Net Assets $921K
MCAP @ $0.59 ~$38M
8. Resapp Health (RAP)
We know this story, and essentially they’ve come to the market saying that they’ve fixed up the execution and clinical issues for upcoming clinical studies in the next few months (they are funded for it so that’s good). Will be interesting to see if things pan out the way it did prior to the share price fall (~90% accuracy in diagnosis).
$50M Market cap currently so might be a cheap pickup for the speculator
9. Family Zone (FZO)
Business model based on them selling technology that restricts harmful sites to kids. So far they’ve been aiming schools by offering to give it to them for free (schools can then also restrict kids from accessing certain sites), on the condition the schools promote it to the families in the school, and according to feedback, there has been a great take-up.
Strong adoption rates and the products were officially offered in July 2016. Lots of partnerships which are good. Revenues of $1.6M represent an awesome takeup-rate, having only had revenues of $5.5K in FY16 (development stage). Another quarter result to really gage momentum would be great. Need to better understand where all the money is being spent.
Gross profit $620k
Cash $1.4M plus $5.2M raising
Net Assets -$2.6M
MCAP @ $0.84 ~$51M
10. Nuheara (NUH)
We know the story and nothing really different about it except they may be bringing out a new product in the next few months. Christmas quarter will be a strong indicator of whether they can leverage the 5,000 stores they currently are in to bring them revenue.
Next quarterly is the make or break.
Personally tested the product as well, and that was quite interesting. Product does exactly what we’ve all heard about and is amazing in dampening external noise and being able to focus on what you want to hear.
Shares 260M fully diluted
MCAP @ $0.058 ~$15M
11. Robo 3D (RBO)
They do 3D printers as well but much smaller things. Products are already developed and being sold at numerous retailers/online stores such as Amazon, Foxconn, Bestbuy…
Operationally making money, but came out at a loss in FY17 mostly because of the listing (RTO). Not sure what to think here considering they are getting sales, but the loss was so large. Keep an eye on it.
NPAT -$9.4M (3M from listing, but still quite high)
Net Assets $8.8M
Shares 259M and raised another 800K
MCAP @ $0.053 ~$14M
12. Mobilicom (MOB)
Offers a product that allows communication between things like ships and aircraft. Necessary and a strong market, eg. oil operations in the ocean – traditional methods require setting up infrastructure, and calls via satellite phone – very expensive.
Their product has been awarded government contracts already, and in the tender for one of the contracts (can’t remember exact but the CEO said this to me), was won over 17 other competing firms offering similar tech.
They are now also targeting the commercial sector as the growth there is much larger (margins also great), and are signing contract after another.
Post 3Q announcement
– Potential sales of $1.4M via design with with Japanese manufacturer of UAV, eLAB
Net Assets $9.4M
MCAP @ $0.165 ~$35M
13. Scout Security (SCT)
DIY IOT-connected home security devices which run on batteries
Can mix and match to home needs
Need to see how they can translate top-line figures to profits. So far, it’s hard to read their statements having just IPO’ed.
Promising considering US$1.9M revenues from FY16 alone.
Revenue (FY16 had US$1.9M revenue)
Shares 259M and raised another 800K
MCAP @ $0.155 ~$40M