Addvalue Technologies Ltd - NRA Capital Research 2018-02-08: Back On The Growth Track

Addvalue Technologies Ltd - NRA Capital Research 2018-02-08: Back On The Growth Track ADDVALUE TECHNOLOGIES LTD SGX: A31

Addvalue Technologies Ltd - Back On The Growth Track


Joint laboratory with A*Star has speeded up development

  • Addvalue’s joint laboratory with A*Star was cited by the Minister for Trade and Industry S. Iswaran on 5 Feb as an example of how public and private sector partnerships can speed up the development of solutions based on real industry needs.
  • According to the media report, the joint laboratory will develop Internet of Things (IoT) solutions for satellite communications and research on bridging gaps in existing inter-satellite communication links.



In advanced discussion with customers.

  • As per its 28 Nov 2017 announcement, Addvalue has been contacted by key players in the LEO satellite industry after it signed the IDRS (Inter-Satellite Data Relay System) airtime distribution agreement with Inmarsat on 10 August 2017.
  • Specifically, Addvalue is in advanced stage of discussions with a few LEO satellite players with plans to launch or operate constellations of satellites that will lead to the deployment of multiple IDRS terminals, including customized sets, over the next few years.


Implies steady progress of IDRS Business.

  • Our interpretation of the above are
    1. the joint laboratory has probably accelerated the development of customised IDRS products,
    2. the IDRS may be used to enable realtime communication as part of a larger IoT solution, and
    3. there may be business opportunities for Addvalue as Mr. Iswaran’s remarks were made at the fifth A*Star Aerospace Technology Leadership Forum held in conjunction with the Singapore Airshow, which will likely be visited by key industry members.


Expanding in the small vessels market

  • In Oct 2017, Addvalue announced that it will be offering its maritime solutions to a target market of at least 500 deep-sea fishing vessels, commencing with a two-month trial from Nov 2017 and followed by a commercial rollout in 2018.
  • In Jan, Addvalue obtained type approval from the relevant Russian maritime authority for the Thuraya Atlas IP terminal (a first for Thuraya maritime satellite terminals) that was developed pursuant to an Addvalue-Thuraya design and supply contract.
  • In Feb, Addvalue further announced a collaboration with the only entity authorised by the PRC government to operate BeiDou services outside China. Beidou is China’s version of GPS.


2H FY18 / FY19 outlook has improved.

  • The small vessel market is demanding for solutions to meet modern demands, e.g. shipboard equipment-to-equipment reporting, remote data retrieval and position reporting. The Feb collaboration entails product development and training to support the fishing vessel industries in China and SEA. An initial order of US$1m is expected to be fulfilled during 2H 2018 with expected combined revenue of more than US$12m over three years.
  • Given new market entry, e.g. Russia, in recent months, we reckon that Addvalue will likely perform better in 2H FY18 (ending March 2018) or FY19, compared to 1H FY18.




Liu Jinshu NRA Capital Research | http://www.nracapital.com/ 2018-02-08
SGX Stock Analyst Report NOT RATED Maintain NOT RATED 0.079 Same 0.079


* The report is produced by NRA Capital under the ‘NRA Research Scheme’ and NRA Capital has received monetary compensation for this valuation report.



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