Addvalue Tech: (S$0.058) New game-changer in space technology?
By Clement Ho (Maybank KE Retail Research)

The share price of Addvalue Tech has shot up 61% year-to-date from $0.036 to $0.058, following positive corporate developments, which could signal a turnaround may be in sight.

Briefly, the communications technology product innovator raised eyebrows when it launched its industry-transformative inter-satellite data relay system (IDRS) in Dec 2016.

265 colin chanDr Colin Chan, Chairman and CEO of Addvalue Technologies
Notably, IDRS allows commercial satellite operators to maintain continuous contact with small satellites in low earth orbit via the existing Inmarsat-4 constellation.

This is a significant development as previously, operators were only able to send/receive signals to/from satellites that are within sight of an earth station, resulting in a 15-minute to 2-hour blackout period with the satellite in orbit.

The group has received a flurry of enquiries after it entered a MOU with global satellite communication giant Inmarsat in Feb 2017, giving it exclusive rights to a share of Inmarsat's air time distribution revenue derived from IDRS.

Stock price 

6.3 c

52-week range

2.8 – 6.3 cts

PE (ttm)

--

Market cap

S$100 m

Shares outstanding

1.58 b

Dividend yield
(ttm)

--

Year-to-date return

75%

Source: Bloomberg

The MOU was underpinned by completion of a secret one-year in-space testing for IDRS.

Inmarsat, a US$4.92b market cap company listed in London, is now ready to take IDRS to full commercialisation, providing its existing clientele a value-added offering.

Currently, Addvalue Tech is pending finalisation of the Inmarsat MOU on detailed airtime pricing plans, which will be modeled to mobile data plans. If this materialises, it could provide a steady income stream for the tech firm.

Additionally, the group could be getting a $2m investment by an established venture investment firm via a 5% 5-year convertible bond issue.

This spells added confidence that the IDRS could be a game-changer for the group despite not having generated any revenue at this point.

Further, the subscription requires that Addvalue work towards a spin-off for new space technology before the maturity of the issue.

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