Stratech Group

[flanforever]

Stratech had a difficult past but its fortunate is changing and people are taking notice of this.

Of the five FOD detection systems approved by FAA, I can confidently say iFerret is the best. Its night vision superiority allows night time visual confirmation of FOD whereas the rest are unable to do it.

Because it is using vision technology instead of radar imaging, iFerret is also expandable to include airport surveillance, runway pavement monitoring and battle damage assessment. Its iVACs can also be used for train undercarriage monitoring and that is in their plans.

There are many more under its sleeves but let Stratech announce it at the appropriate time

Radar imaging doesn't work at night?

[Sampling]

Radar imaging doesn't work at night?

For FOD purposes, radar imaging actually works better at night!

Iferret's main advantage of using machine vision tech is actually the ability to perform surveillance. In lay man terms if there's something the machine cannot tell if it's trouble or not, a human being can actually view the image that looks like a camera image rather than a radar image.

I reckon is depends on the fit for purpose as a normal monitoring camera will be cheaper than putting an iferret but if you need to do FODs and at the same time do surveillance at the same area, an iFerret is better?

one particular weakness is as it's using machine vision tech, it's susceptible to things like fog, haze or anything that blocks light/infrared. Radar imaging uses eletrocmagnetic which is less affected by these things.

[Curiousparty]

"Light of sight" has to be available for all devices, whether radar or iFerret. If line of sight is blocked, then NO DEVICES can be effective.
Is my understanding correct?

*******

Radar imaging doesn't work at night?

For FOD purposes, radar imaging actually works better at night!

Iferret's main advantage of using machine vision tech is actually the ability to perform surveillance. In lay man terms if there's something the machine cannot tell if it's trouble or not, a human being can actually view the image that looks like a camera image rather than a radar image.

I reckon is depends on the fit for purpose as a normal monitoring camera will be cheaper than putting an iferret but if you need to do FODs and at the same time do surveillance at the same area, an iFerret is better?

one particular weakness is as it's using machine vision tech, it's susceptible to things like fog, haze or anything that blocks light/infrared. Radar imaging uses eletrocmagnetic which is less affected by these things.

[Sampling]

"Light of sight" has to be available for all devices, whether radar or iFerret.

If line of sight is blocked, then NO DEVICES can be effective.
Is my understanding correct?

Tks.

Well, according to this thread iFerret uses light/infrared to produce "machine readable images" which is used by the system to detect foreign objects. Light/infrared is more susceptible to what you refer to as "light of sight" or things like fog/haze. Radar imaging on the other hand uses electromagnetic to produce a machine readable image which is less affected by this.

hope this is useful?

[Curiousparty]

Just looking plainly at anecdotal evidence:-
a. How is it possible that iFerret managed to oust the incumbent and other competitors at the Dubai airport ?
b. And this is not once but twice. Then it managed to oust its competitors again at Hong Kong airport....
c. Thirdly, why is iFerret being deployed in the airbase of one of the world's leading Air Force?

Is the above mere coincidence of triple events?

Tks.

[littleones]

"Light of sight" has to be available for all devices, whether radar or iFerret.

If line of sight is blocked, then NO DEVICES can be effective.
Is my understanding correct?

Tks.

Well, according to this thread iFerret uses light/infrared to produce "machine readable images" which is used by the system to detect foreign objects. Light/infrared is more susceptible to what you refer to as "light of sight" or things like fog/haze. Radar imaging on the other hand uses electromagnetic to produce a machine readable image which is less affected by this.

hope this is useful?

The key lies in using vision technology and Stratech's proprietary software developed and fine tuned over the past decade. This results in an image taken of an unlit runway at night that similar to one taken during day time. This is the edge that iFerret has over other systems

[specuvestor]

60 airports
2% x 10,000 = 200 airports with possibility of FOD automation.
If Stratech manages to corner 30%, 0.3 x 200 = 60 airports.
Finally, "20 airports" at steady state is assumed.

Net Profit Margin
Is 20% NPM an unreasonable assumption?
http://pages.stern.nyu.edu/~adamodar/New...argin.html

Spreading of contract value
many tks for the suggestion. Will spread $47mil over 7 yrs.

________________________________________________________________________________________________________________________
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions.]

I'm not sure if you understand the difference between installation and maintenance. Installation revenue is lumpy while maintenance is low but stable revenue. For the record you can't average out the lumpy revenue over 7 years and get a good picture. In fact post installation, the upgrade of Changi Airport is not going to be near the installation value.

But's let's just assume for discussion sake we use your back-of-envelope figures rather than the figures I posted
http://www.valuebuddies.com/thread-6382-...#pid112212

There are 2 major variables in your projection. One is the number of airports and the 20% NPM. As we know over the past 6 years since deployment with Changi Airport, they have been awarded with Dubai and HK. The other 3 airports are testing and trial stage? Based on this track you are expecting them to do 20 airports ANNUALLY steady state? As for the NPM, during 2009 and 2010 when Changi started, the Profit Margin was about 7.9-8.6%. the significance of this is that if we revise the NPM to say 10% and 5 NEW airport installation wins (which they already have 2) for say FY2016 (so that your average revenue assumption makes more sense) to have earnings of $0.9m/2 * 5 = $2.25m and we will have your scenario d. $22.5m market cap and roughly 1.5cts share price, what it was trading prior to share swap.

Since we are looking at history, this company basically lost all the IPO monies in first 3 years and proceeded to lose $100m next 10 years including rights monies.

BTW with ref to the previous postings on revenue recognition, do note that Stratech uses an unusual fiscal year for Singapore companies but usual for Indian companies ie for year starting 2015 April it is for FY2016

[Curiousparty]

Brilliant

If such a historical approach (rather than "forward looking approach") is taken, then Stratech is quite worthless.

60 airports
2% x 10,000 = 200 airports with possibility of FOD automation.
If Stratech manages to corner 30%, 0.3 x 200 = 60 airports.
Finally, "20 airports" at steady state is assumed.

Net Profit Margin
Is 20% NPM an unreasonable assumption?
http://pages.stern.nyu.edu/~adamodar/New...argin.html

Spreading of contract value
many tks for the suggestion. Will spread $47mil over 7 yrs.

________________________________________________________________________________________________________________________
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions.]

I'm not sure if you understand the difference between installation and maintenance. Installation revenue is lumpy while maintenance is low but stable revenue. For the record you can't average out the lumpy revenue over 7 years and get a good picture. In fact post installation, the upgrade of Changi Airport is not going to be near the installation value.

But's let's just assume for discussion sake we use your back-of-envelope figures rather than the figures I posted
http://www.valuebuddies.com/thread-6382-...#pid112212

There are 2 major variables in your projection. One is the number of airports and the 20% NPM. As we know over the past 6 years since deployment with Changi Airport, they have been awarded with Dubai and HK. The other 3 airports are testing and trial stage? Based on this track you are expecting them to do 20 airports ANNUALLY steady state? As for the NPM, during 2009 and 2010 when Changi started, the Profit Margin was about 7.9-8.6%. the significance of this is that if we revise the NPM to say 10% and 5 NEW airport installation wins (which they already have 2) for say FY2016 (so that your average revenue assumption makes more sense) to have earnings of $0.9m/2 * 5 = $2.25m and we will have your scenario d. $22.5m market cap and roughly 1.5cts share price, what it was trading prior to share swap.

Since we are looking at history, this company basically lost all the IPO monies in first 3 years and proceeded to lose $100m next 10 years including rights monies.

[littleones]

60 airports
2% x 10,000 = 200 airports with possibility of FOD automation.
If Stratech manages to corner 30%, 0.3 x 200 = 60 airports.
Finally, "20 airports" at steady state is assumed.

Net Profit Margin
Is 20% NPM an unreasonable assumption?
http://pages.stern.nyu.edu/~adamodar/New...argin.html

Spreading of contract value
many tks for the suggestion. Will spread $47mil over 7 yrs.

________________________________________________________________________________________________________________________
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions.]

I'm not sure if you understand the difference between installation and maintenance. Installation revenue is lumpy while maintenance is low but stable revenue. For the record you can't average out the lumpy revenue over 7 years and get a good picture. In fact post installation, the upgrade of Changi Airport is not going to be near the installation value.

But's let's just assume for discussion sake we use your back-of-envelope figures rather than the figures I posted
http://www.valuebuddies.com/thread-6382-...#pid112212

There are 2 major variables in your projection. One is the number of airports and the 20% NPM. As we know over the past 6 years since deployment with Changi Airport, they have been awarded with Dubai and HK. The other 3 airports are testing and trial stage? Based on this track you are expecting them to do 20 airports ANNUALLY steady state? As for the NPM, during 2009 and 2010 when Changi started, the Profit Margin was about 7.9-8.6%. the significance of this is that if we revise the NPM to say 10% and 5 NEW airport installation wins (which they already have 2) for say FY2016 (so that your average revenue assumption makes more sense) to have earnings of $0.9m/2 * 5 = $2.25m and we will have your scenario d. $22.5m market cap and roughly 1.5cts share price, what it was trading prior to share swap.

Since we are looking at history, this company basically lost all the IPO monies in first 3 years and proceeded to lose $100m next 10 years including rights monies.

BTW with ref to the previous postings on revenue recognition, do note that Stratech uses an unusual fiscal year for Singapore companies but usual for Indian companies ie for year starting 2015 April it is for FY2016

You should not use 2009 as the starting point as that is the year FAA did an extensive testing of the iFerret over a one year period before giving its approval to iFerret in 2012. So the actual starting point for commercial award of contract should be from 2012 onwards. Since then it got 3 contracts. Besides the 6 runway airport, I understand iFerret is also extensive tested in Miami, Doha (Qatar) and Colombo. Currently the USAF is integrating iFerret BDA with their BDA software

[specuvestor]

Brilliant

If such a historical approach (rather than "forward looking approach") is taken, then Stratech is quite worthless.

wow so we have to assume you are brillant enough to forecast margins double of Changi for the new projects? Why don't you answer the discussions directly since I have to help you dig out the margins for FY2009-10 after my repeated questioning?

Forward looking has to be anchored on track record else what is the difference betwen dot com forward looking? Maybe that's where you get your original 50% margins from... thin air

You should not use 2009 as the starting point as that is the year FAA did an extensive testing of the iFerret over a one year period before giving its approval to iFerret in 2012. So the actual starting point for commercial award of contract should be from 2012 onwards. Since then it got 3 contracts. Besides the 6 runway airport, I understand iFerret is also extensive tested in Miami, Doha (Qatar) and Colombo. Currently the USAF is integrating iFerret BDA with their BDA software

2009 is the starting point where they actually have revenue and income from iFerret for you to make REASONABLE PnL estimate.

Even if we say starting from 2012 then it has say 2 (3?) project wins with revenue FY2016 and zero for 2012-2014. But since CP is not interested in history so basically you think it will get another 8 contracts this year? They better have a lot of spare capacity to do a lot of tests, rather than like us running numbers in spreadsheets and looking at history