AddValue Technologies

[Sampling]

Just sharing some news I found sometime back...

Source:
http://www.bymnews.com/news/newsDetails.php?id=74134

Singapore. Addvalue partners Globe Wireless to roll out new FleetBroadband system Globe iFusion
Friday, 03 September 2010


Addvalue Communications Pte Ltd, a wholly-owned subsidiary of SGX Mainboard-listed Addvalue Technologies Ltd ("Addvalue") has announced that Globe Wireless, which serves over 550 ship operators with over 10,000 ships using its products and services, has officially launched Globe iFusion service to the maritime industry. Globe iFusion is the next generation of maritime satellite communications , a solution designed specifically for IP satellite systems that fully integrates shipboard satellite communications, shoreside administrative control, GSM voice and data, and a comprehensive crew communications service.

Addvalue is proud to have partnered with Globe Wireless in the design and development of the Globe i250, the shipboard component of iFusion. Integrated into the Globe i250 is the FleetBroadband technology developed by Addvalue. The system is highly integrated, versatile and configurable to provide a total communication solution.

The Globe i250 allows the user to make voice calls using a GSM handset or normal fixed-line telephone, send/receive email and fax, browse the Internet, and up/down load files. It also allows users to access Globe Wireless commercial applications on the system. The total solution provided by this new Globe i250 system is a completely new way for shipping companies to manage communication with their ships.

Frank J Coles, President and CEO of Globe Wireless said, "We have entered a new phase in maritime communications. This solution fuses service, applications and support into a single solution. Addvalue has contributed greatly to the successful design and launch of iFusion, and we are looking forward to a rapid uptake of this innovative service. The solution includes a dual firewall, highly optimised IP connections, and multiple least-cost route gateways. It is ready for the future, including Ka services."

"We are delighted that within a short span of time, we have not only successfully developed such a complex customised product but have also shipped a significant number of the product to Globe Wireless for immediate deployment." said Dr Colin Chan, Chairman and CEO of Addvalue.

Added Dr Chan, "Although the Globe i250 solution is based on FleetBroadband technology, it offers versatility and capability unmatched by any of a standard FB250 terminal that is available in the market today."

The Globe i250 system was type approved by Inmarsat in August 2010 for commercial deployment. Addvalue has started to supply the quantities of Globe i250 systems to Globe Wireless in preparation for mass deployment in the coming months.

[Sampling]

Anyone remember AddValue Tech?



Q2 FY2011 revenue soared by more than 13-fold to S$6.1 million and net profit accelerated to S$2.0 million from a loss of S$2.8 million in Q2 FY2010
In tandem, H1 FY2011 revenue soared by nearly 10-fold to S$12.0 million and net profit accelerated to S$3.3 million from a loss of S$3.4 million in H1 FY2010

- Continued robust sales of wider range of Inmarsat-centric land and maritime BGAN-based products boosted Q2 FY2011 performance

- Gross profit surged by more than 13-fold in Q2 FY2011 to S$3.3 million from S$0.3 million in Q2 FY2010 (with gross profit margin improved from 53.4% to 54.3%) and by more than 12-fold in H1 FY2011 to S$5.9 million from S$0.5 million in H1 FY2010 (with gross profit margin improved from 40.5% to 48.8%)

- Working capital reversed from a negative of S$2.8 million as at 31 March 2010 to a positive of S$2.7 million as at 30 September 2010 while gearing improved from 95.2% to 37.8%

http://info.sgx.com/webcoranncatth.nsf/V...E00379D6B/$file/AVT-Press_Release_for_Q2FY2011.pdf?openelement

[dydx]

The Q2-FY11 results announcement makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...E003759E0/$file/AVT-2Q2011_Results_Announcement.pdf?openelement

While the Q1 and Q2 P&L numbers look good, we must bear in mind Addvalue's satellite communications terminals business still remains at a small scale. To make it to a respectable global player - like Thrane & Thrane [http://www.thrane.com/] - Addvalue will need to scale up and achieve volume sales, develop a wider range of terminal products, build a global distribution network, and bring up its "Wideye" brandname, than just selling based on lower prices. All these will take time and a lot of efforts, and sustained capex spending. So it is likely that Addvalue will have to retain its earnings and withhold dividends for sometime to come, as well as raising more capital from new share placements.

I was a little disturbed when the company did a 'preferential' share placement of 94.0m new shares at $0.035/share in Jul10 (when the counter was already trading at the $0.04 level) to 3 'big fishes' and 1 'old friend'.....
http://info.sgx.com/webcoranncatth.nsf/V...2003B62C8/$file/AVT-Placement_of_94m_shares.pdf?openelement
and gave its staff and management a generous 110.0m stock options (convertible at $0.035) in Jun10, soon after the release of its FY10 (ended 31Mar10) in May10.

Based on the 977.9m issued shares as at 30Sep10, and the last done share price of $0.045, Addvalue's market cap now stands at $44.0m - equivalent to 3.8x BV and a current year PER of 6.6x. The outstanding 122.5m stock options, when converted into new shares over time, will have a 11.1% dilutive impact on earnings/EPS.

[Sampling]

Very high volume today... hmmm anyone has any idea why?

[dydx]

Addvalue, in partnership with Thuraya, is launching yet another maritime satellite comms terminal - the "Seagull 5000i" - targeted at small vessels and fishing boats.....
http://info.sgx.com/webcoranncatth.nsf/V...D001D0667/$file/Joint_PR_Thuraya_launch_Seagull5000i.pdf?openelement
The terminal is designed to provide voice, data, SMS and fax services that are based exclusively over Thuraya’s satellite network.

Perhaps it is also timely to take a look at Addvalue's Q3/9M-FY11 (ending 31Mar11) results released sometime ago.....
http://info.sgx.com/webcoranncatth.nsf/V...6003A2AF5/$file/AVT_Announcement_3Q2011_Results.pdf?openelement [Q3 (ended 31Dec10)-FY11 results announcement]
http://info.sgx.com/webcoranncatth.nsf/V...6003AD753/$file/AVT_Press_release_Q3FY2011.pdf?openelement [Press release]

Notwithstanding the fact that Addvalue has been showing profits in the first 9 months till 31Dec10, there is enough evidence from the accounts that the business continues to run on a tight cash flow - something like a 'from hand-to-mouth' state. It is certainly not easy to run a business which requires financial resources to spend on R&D, launching of new products, manufacturing, and also providing distributors with trade credit - all at the same time!

[Sampling]

Trading Halt today....


Can't wait for announcement ... Hope it's good news !

[dydx]

The FY11 (ended 31Mar11) full-year results makes interesting reading....
http://info.sgx.com/webcoranncatth.nsf/V...B00509505/$file/AVT_4Q2011_Results.pdf?openelement [Results announcement]
http://info.sgx.com/webcoranncatth.nsf/V...B00505A2B/$file/AVT_Press_release_Q4FY2011.pdf?openelement [Press release]

It is relevant to note -
(1) Q4's and full-year's NP are boosted by a new $2.547m income tax credit - related to unutilised tax losses carried forward from past years, and the amount can be used to defray future income tax. Excluding this item, Q4's and full-year's operating NP would be lower than the numbers reported.

(2) H2's revenue of $8.406m is substantially lower than H1's of $11.99m. This doesn't indicate at all demand and shipment for existing products are growing!

(3) Despite a positive working capital position, there are signs that liquidity as at 31Mar11 remained tight, as current assets were substantially financed by total borrowings of $4.8m and trade payables of $1.69m. As I have said before, it is difficult to grow a business which requires on-going R&D capex, having its own manufacturing operation, international marketing, and granting 3 months' trade credits to customers/dealers.

I suppose that's why Addvalue is doing yet another private share placement - 86.0m new shares at $0.04, to raise net $3.38m.....
http://info.sgx.com/webcoranncatth.nsf/V...C001E60B2/$file/AVT_Placement_26May2011.pdf?openelement
This new share placement will raise Addvalue's issued shares base to 1,083.9m, and in the process dilute the ownership/economic interests of all existing shareholders by 7.9%. And this is not the end, as there are 120.87m employee 5/10-year stock options (mostly convertible into new Addvalue shares at $0.035/option) outstanding as at 31Mar11. When converted, there will be further 9% dilution on all existing shareholders.

Like that, how to invest?!

[Musicwhiz]

Hi dydx,

Thanks for your summarized analysis, always appreciate the numbers and your insights!

So it appears "Addvalue" does not add much shareholder value!

[Sampling]

Thanks dydx for the analysis....

I'll probably take my profits and get out of this one...

[Musicwhiz]

Business Times - 07 Jun 2011

SME INC
Addvalue builds on trust of its customers

By HOON YI SHYUAN

PERSISTING through its years of losses, Addvalue Technologies has finally established itself as a reliable developer and manufacturer of mobile satellite terminals and is riding on the waves of success.

Most recently, the company posted a record high net profit of $7.5 million in its FY2011, a marked improvement from its $3.3 million loss in FY2010.

Colin Chan, chairman and CEO of Addvalue, attributes the company's turnaround to its success in establishing trust in its customers.

'You need to establish a name for yourself. If you don't have that, it's difficult to sell. It took us quite a number of years to get in and penetrate this market,' said Dr Chan.

'Gaining recognition and earning the trust of people takes time. That is why we continued to incur losses all these years until we showed that our product was reliable.'

High-profile events that helped put Addvalue on the map included the successful deployment of its satellite terminals in both Brazil's municipal elections in 2008 and the Philippines' elections in 2010.

In both scenarios, Addvalue's satellite terminals ensured the secure transmission of election results.

Because brand loyalty is a key factor in a satellite company's success, Dr Chan recognises it as a high barrier to entry and likens the satellite industry to a club.

'If you're not in, it's very difficult to get in but once you're in and you establish yourself, you're very protected because people can't get in easily,' said Dr Chan.

To date, Addvalue is one of the few authorised developers of the Inmarsat range of satellite terminals.

It is one out of the two players worldwide that offer the Inmarsat class 3 land terminal and the FB150 maritime terminal.

Furthermore, Dr Chan feels that establishing a wide customer base was also crucial to Addvalue's success.

Addvalue launched its first product, a mobile satellite terminal for land called the SABRE 1, in 2007.

Since then, it has developed and manufactured a range of terminals operating on major satellite networks for maritime (SKIPPER 150, SEAGULL 5000) applications as well.

'You need to have a range of products. You cannot just rely on one product. When we had five or six products out, we managed to reach out to different segments of the market and we saw a turnaround of the company,' said Dr Chan.

Addvalue also sets itself apart from other solution providers because it is comparatively smaller and hence, more flexible.

'Satellite solution providers are mostly big companies. They are not as flexible as us. We are more accommodating. If a customer requests for a certain application, we are prepared to engineer and prepare prototypes for them. We are prepared to tailor solutions for our customers.'

Indeed, Stratos' request for a solution for Supervisory Control And Data Acquisition (SCADA) led Addvalue to modify its SABRE 1 product.

To date, the company has established itself as a key partner to many major players in the satellite communications industry, counting among its customer base internationally renowned leaders such as Inmarsat, Thuraya, Stratos, Vizada, Satlink, and Globe Wireless.

Most of the major satcom equipment and airtime distributors have partnered with Addvalue to market their products, thereby enabling Addvalue to distribute its products globally.

The SAFARI, Addvalue's new vehicular unit, is set to launch at CommunicAsia 2011.

Looking ahead, Addvalue plans to continue to increase the distribution and market penetration for its existing products.

At the same time, it will also continue developing innovative products and services in areas that have not yet been reached.

Commenting on Addvalue's prospects, Dr Chan said, 'All these years we've stayed very focused. Right now, given our technology and the name that we've established for ourself, we believe that we have a tremendous opportunity.'