HCL HighCom Limited (Prev XTEK Ltd (XTE)

Hmm feeling quietly miffed that I didn't participate in the 45c CR 3 weeks ago when it's now trading at 61c.

Final Report is out: https://stocknessmonster.com/announc....asx-3A522878/

OPERATING RESULTS
Key Points:
• Group revenue of $37.86m – a 119% increase from FY18
• Group EBITDA of $478,113 – a 106% increase from FY18
• Group net profit of $168,433 – a 21% increase from FY18
• Reduced gross margin percentage, a one-off

MC $28.2m
No debt
Cash on hand $5.3m

The market so far has not valued Xtek in line with its numbers as, at the moment, the majority of their revenue comes from low margin re-selling of SUSA (Small Unmanned Aerial Systems). Higher margins are going to come from:

- service contracts relating to SUSA
- sales from HighCom (acquired this year)
- propitiatory product like XTclave and XTatlas

I'm hoping for a re-rate closer to $1 based on these numbers (current SP 58c). Also directors have been buying of late.

Revenue of $38m and net profit of $168k? I think low margin is a generous description.

Last week due to some portfolio reshuffling I sold some Xtek shares because quite frankly I had a lot but now they've gone gangbusters (at one stage reaching 75c) and a pause in trading today because of some news coming. Typical :(

Still going strong. ATHs have been beaten almost daily. Probably will be around 80c when open. After having held them for 3 years believing they were undervalued the market has finally woken up. Yet feeling a bit ill of having left so much money on the table by downsizing my big parcel. Still got a few tho so all a bit bittersweet.

Quote:

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Originally Posted by silu

Still going strong. ATHs have been beaten almost daily. Probably will be around 80c when open. After having held them for 3 years believing they were undervalued the market has finally woken up. Yet feeling a bit ill of having left so much money on the table by downsizing my big parcel. Still got a few tho so all a bit bittersweet.

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If it makes you feel better, I did the same 🤦*♂️

Quote:

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Originally Posted by duncan22

If it makes you feel better, I did the same ��*♂️

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Feels good to share the pain brother ;)

The uptrend is relentless. Currently up to 94c and never felt more ill having been proven right.

When it goes up it goes down and currently up again on very good news. After 4 years of accumulating this imo is still very much an undervalued stock. Revenue forecast for FY20 = Market Cap. Funny that.

I've done surprisingly well trading this micro cap despite being an illiquid stock. Never pushing big volumes to wipe out whole lines just nibbling along the line. Have recently topped up at 26c and 38c to ride a little wave after it's recent big contract wins and good annual result announcement.

Revenue more than doubled
Gross margin increased to 47%
NPAT of $8.2m

Reasons why I will hold for the foreseeable future:
Company will announce capital management strategy as they have lots of cash
They will pay down all debt in 2023
25m of tax losses not yet realized
Increased spending on defense by Australia, Japan, Europe etc
77% of 2022 revenue ($45m) already booked in orders for 2023
Pipeline of leads worth over $100m

All that for a MC of $41m (at 40.5c). Yes this won't trade at standard PE multiples as it doesn't really have recurring revenue streams but with prudent capital management and big contract wins there are some nice gains to be made in my view.