CFA Society Singapore
SINGAPORE (Feb 8): NRA Capital says loss-making satellite communications player Addvalue Technologies could well be back on the growth track soon.
This given its partnership with A*Star, steady progress in the inter-satellite data relay service business as well as expansion in the small vessels market.
Addvalue's partnership with A*Star was recently held up by the Singapore Government as an example of how public and private sector partnerships can speed up the development of solutions based on real industry needs.
According to media reports, the joint lab will develop Internet of Things (IoT) solutions for satellite comms and research on bridging gaps in existing inter-satellite comm links.
And after it signed the Inter-satellite Data Relay Service (IDRS) airtime distribution agreement with Inmarsat last August, Addvalue says it has been contacted by key players in the LEO (low earth orbiting) satellite industry.
The group is also 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 over the next few years.
In an unrated report on Thursday, analyst Liu Jinshu reckons Addvalue's A*Star tie-up has probably accelerated the development of customised IDRS products which may be used as part of a larger IoT solution. This could open up business opportunities for Addvalue.
Last Oct, Addvalue announced it was offering its maritime solutions to a target market of at least 500 deep-sea fishing vessels, starting with a two-month trial from Nov 2017 followed by a commercial rollout in 2018.
In Jan, Addvalue obtained approval from the relevant Russian maritime authority for the Thuraya Atlas IP satellite terminal that was developed according to an Addvalue-Thuraya design and supply contract.
In Feb, Addvalue further announced a collaboration with the only entity authorised by the China government to operate BeiDou services outside China. Beidou is China’s version of GPS.
Liu says the small vessel market is demanding for satellite comms systems to meet modern demands like 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 South-east Asia. An initial order of US$1 million is expected to be fulfilled during 2H18 with expected combined revenue of more than US$12 million over three years.
"Given new market entry like Russia in recent months, we reckon that Addvalue will likely perform better in 2H18 or FY19 compared to 1H18," says Liu.
As at 12.49pm, shares in Addvalue are up 0.1 cent at 4.2 cents.