Review of $Excelpoint(BDF.SI) 's quarter results:
A few plus points:
1. Revenue increase of 17%. Even though profit margin didnt increase much, revenue is still growing steadily. This means that they are getting more and more business from their customers.
2. FINALLY, cash flow generated from operating activities!! 3 million generated compared to 21million used in the same quarter last year. This is despite rising revenue and profits. I see this as a MAJOR plus point as they are improving their cash flow.
3. Usage of placement shares proceeds. 5million of the 7 million is dedicated to Investments and Acquisitions. With this, Excelpoint will be able to possibly ramp up distribution/production and increase their profitability.
4. Strategic partnership with Analog Devices ADI is an american semiconductor company with 5.4 billion USD in revenue in 2016. Hopefully Excelpoint will be able to leverage on this relationship to boost their revenue. Even with just a small percentage of revenue clinching, i believe they will be able to increase their profit manyfold.
A few negative points:
1. Increase in interest expense due to borrowings.
2. Increase in borrowings.
3. A slight drop in EPS because of the increased number of shares.
Overall, this is a great set of results, and the major plus points being the improved operating cash flow of the company and the strategic partnership with ADI.
With this set of results, Excelpoint is on par to record an EPS of 7.36 US Cents for the full financial year if we compare with the previous year. This means that, the current price represents just 6.5x PE.
If Excelpoint just grows to a PE of 10, it is worth at least $1.00. Excited for what this company has in store!