Rectifier Technologies Limited ("RFT")

[steve fleming]

http://www.rtp.com.au/

Copy of my post on h/c...just putting it out there as there is no thread for RFT on ST

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Pudu/ Wangs got involved in RFT to utilise their chinese connections to drive sales from China as a medium term strategy. China is what they saw that could drive some decent growth in the business. Nothing much happened for a couple of years. But a couple of key announcements at the back end of 2013 and a return to NPAT profitability suggests this strategy maybe now working.

IMO (apart from QTG) at just over $4m it's the cheapest (by m/c) exposure to a genuine, growing NPAT positive business on the ASX

Still a long way to go to become 'investment grade' from a fundies perspective. Low quality board, poor governance and a pretty opaque register. Though I guess having a substantial chinese listed company as a major shareholder now helps a bit. Given the low 'quality' qualitative aspects, the numbers are going to have to be the driver of the share price, unless chinese money starts to get interested.

I have asked Management to get their Form 603s and 604s lodged for all the change in shareholding activity of late last year, before ASX gets on their case.

Hold a few mil of these, so see how we go as a hopefully lower risk profitable spec play

[Well Endowed]

Hi Steve, looks interesting. Do they hold patents/competitive advantages for their AC/DC converters/peripherials, or is it more of a niche manufacturing play?

I had a read through the last handful of announcements, looks like plenty of registry movement between chinese counterparts. The cost savings largely driven by the movement of manufacturing location to malaysia and redundancies/resignations, further profitability likely to be generated by contract wins?

The company structure and business has similarities with MLA I reckon. Will have to do some further reading.

Cheers,

[stoploss]

HI steve ,
I am happy for a punt joined you on the register , in @ .004

Cheers.

[Well Endowed]

but a bit of a flurry of activity on open, still reading through reports! might've missed the boat hah

[percy]

HI steve ,
I am happy for a punt joined you on the register , in @ .004

Cheers.

Me too,1mil at 4cents at open.Did not get the contract note until they were going through at 5 cents,so thought I may have missed.So we are up 25% in a day."That's incredible."
Thank you Steve.

[stoploss]

Steve I hope they haven't sold the Golden goose ?

[stoploss]

"In the 6 months to 31 December 2013, RTUK contributed approximately 35% of RT’s revenue and was the largest contributor to RT's group profit"

Bit sucky. But at least you don't own PBT right?

correct not in that one thankfully. ( at least I only have half a cent to lose here !! )

[percy]

Well its either the right thing to do,or it is the wrong thing to do.
If you are prepared to sell your biggest earner you must be confident the proceeds of the sale can generate better returns.
The people with the most at risk have decided it is the right thing to do.Half a million pound should bolster the finances.[A$900,000]
We have paid our money to join the party,so lets see what happens.!

[steve fleming]

Well its either the right thing to do,or it is the wrong thing to do.
If you are prepared to sell your biggest earner you must be confident the proceeds of the sale can generate better returns.
The people with the most at risk have decided it is the right thing to do.Half a million pound should bolster the finances.[A$900,000]
We have paid our money to join the party,so lets see what happens.!

Yes RFT very much a China story

Their UK operations have plodded along OK historically selling their battery charger units to rail companies, but have always been a bit non-core. As per the announcements from late last year and per Management’s strategy, the focus is to drive sales from Americas/Asia and in particular China. Low cost manufacturing out of Malaysia is a key driver.

Hopefully these operations are now at a level that they can be self supporting, such that the time was right to drop the UK operations, otherwise indeed it would be silly to sell UK after all these years

Anyway good to have Management now focussed solely on the key growth driver - Asia.

[steve fleming]

A link to the RFT / Yimikang share purchase and cooperation agreement (dated 19 December 2013):


http://translate.googleusercontent.c...B4hSLSch58bpPw


Translation is a bit dodgy. Have copied some of the key paragraphs below (with some minor amendments to correct translation issues. Yimikang is referred to as Micon)


Bascially it states, that RFT tech is essential for Yimikang. RFT technology is world leading and has already been licensed through 180 licensing deals. It identifies a number of potential customers who may use the RFT/Yimikang combined product.


Copies of paragraphs below:


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The Target Company (RFT) has a world leader switching power supply technology research and development team, a team Members include founder Mr.Valentino Francesco Vescovi ( is now a director) and technology leaders Mr.Nigel Machin (is now chief engineer), including 15 R & D team.

RFT R & D team has successfully developed the world upper bound of the first 200A-12KW switching power supply, and a wide range of applications in the telecommunications industry; successfully developed a series of dozens of RT, Including various models, specifications rectifier switching power supply, control systems, battery management systems;


Part of technology transfer contracts signed with more than 60 Foreign company, involving more than 180 technology licensing, technology licensing company to buy RT manufacturers throughout Asia, Europe, AmericaAsia, Africa and Australia native, use the company's technology permits the production of RFT power products covering almost every corner of the world.

Active in China since the early nineties communication power supply market, there are many companies that are directly or indirectly benefit from the company's RFT Technology transfer, such as CIMIC (Delta), Putian, Wuhan Intercontinental, Pearl telecommunications, Shenyang AMVIG letter, Asia and Macao, Wuhan able to create, Datang Telecom and so on.


Implementation of the project will make Yimikang (=Micon):


*more efficient, convenient, low cost switching power absorption using RFT's technology development and research, thereby expanding by Micon Precision Environmental aspects related products and services technology involved, upgrade according to meters Kang s professional and technical capacity.


*contribute to the expansion by Micon product applications, synergy present by Micon users mainly in the telecommunications, health care, finance, transportation, energy, manufacturing, and other industries in the data centerand government departments, and the high pressure DC power supply (HVDC) applications


*After the implementation of the project, according to Micon said users will have the ability to provide a leading technology , high efficiency and cost advantages of high voltage DC power supply (HVDC), thereby expanding by Micon product applications; simultaneously with by Micon existing products and services business synergies to further enhance by Micon 's share marketturnover.


*helps improve by Micon scale, thereby enhancing the profitability of applied research from 2007 until the beginning of the domestic high-voltage DC power supply (HVDC), the late start. With the depth of information construction into development, as well as substantive advance, high standards, green room and data center construction market demand national energy policy even stronger.Room and data center energy efficiency, low operating costs, high reliability requirements of the building, will be rectified with high efficiency, high power density, good product stability and product cost-effective high-voltage DC power supply (HVDC) a huge market opportunity .


Bid high voltage DC power supply (HVDC) a huge market opportunity, according to Hui Dian research report 2012 China High Voltage Direct Uninterrupted flow systems market size of about 100 million yuan, is expected to reach 2.5 billion yuan in 2015 market capacity.

China started late HVDC power technology, the overall level and there is a great gap compared to foreign technology, from the overall product On taste and product quality, reliability, it is still a long way to go. Currently on the market is the field of communication to promote high Voltage DC power supply applications, especially since 2007, China Telecom launched high-voltage DC power technology research and in 2011 the Products included in the centralized purchasing, while others, such as finance, electricity, broadcasting, transport, defense, scientific research and other applications in the field of marketing. Rapid progress has yet to be expanded. But the high-voltage DC power supply (HVDC) alternative to AC UPS is an inevitable trend, because the product Life cycle is now in the initial stage, the current cut is more appropriate timing, the first intervention to seize the market and technology companies will be Machine, is conducive to the formation of their own competitive advantage. , the implementation of the project, according to Micon will work closely with the RFT to participate in China's rapid communications, data centers, etc.
The high-voltage DC power supply market segments (HVDC) market competition, sharing high-voltage DC power supply (HVDC) rapidly expanding market.