Turnaround Leads Addvalue On Growth Track

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  • Jun

Turnaround Leads Addvalue On Growth Track

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Summary: Addvalue Technologies Ltd (“AVT” or the “Company”) reported its financial results for the year ended 31 March 2024 on 30 May 2024. The key takeaways are as follows:

  • High topline growth of 65% for space connectivity (“SPC”) and 83% growth for advance digital radio (“ADR”) in FY24 ended March 2024 confirms continuing momentum in these two core businesses.
  • Growing order book of US$8.9m as at 23 May 2024 (+16% from July 2023) bodes well, with future repeat orders and airtime revenue from existing clients supporting near term revenue. Order book of US$7.7m year ago ultimately led to revenue of US$12.77m for FY24.
  • Improved financial stability with turnaround (FY24 PAT: US$0.3m) and positive cash flows (net operating CF: US$1.8m). As one out of only eight space tech companies in our sample set with positive EBITDA, AVT has demonstrated the maturity of its products and services as well as financial viability. This in turn makes AVT even more attractive as an acquisition target given its low share price.
  • Fair value pegged at S$0.022 per share or S$73.3m (cost of equity of 15.72% and terminal value of 5%) or 15.68x FY25F EBITDA of US$3.73m (FY24: US$2.01m). This compares favorably to the peer median of 18.12x. Current share price only reflects 32% of invested capital.

 

Exhibit 1: Financial Summary

Y/E March US$m FY23 FY24 FY25F FY26F FY27F
Revenue 7.55 12.77 17.40 22.26 26.48
Gross Profit 3.60 6.71 9.57 13.36 15.89
EBITDA -0.26 2.01 3.73 6.89 8.93
PAT -2.99 0.28 1.66 4.47 6.43
Equity 5.83 6.13 7.79 12.26 18.69
ROE -50.9% 4.9% 21.3% 36.5% 34.4%
P/E NA 104.0 17.39 6.44 4.48

Source: Historical from announcement. ALAA for forecasts

 

Recommendation

Rating: Buy

Target Price: S$0.022

Current Price: S$0.012

(as at 14 June 2024)

Upside/Downside: +69%

 

Company Profile

Design , development and distribution of communication products and services

 

Share Information

Exchange: SGX Mainboard

Market Cap: S$38.9m

52Wk Hi / Lo: 0.016 – 0.006

1 year avg daily volume: 2.12m shares

 

Valuation Metrics

P/E: 104.0x

P/B: 4.7x

P/S: 2.26x

EV/EBITDA: 16.40x

 

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Disclaimer: The contents above do not constitute any trading opinions or investment strategy. Readers are advised to do your own due diligence before establishing an interest in the subject.

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Tags: Tags: addvalue; satellite; ADR

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