HCL - HighCom Limited

[lorraina]

XTE is a military supplier.XTEK operates as two distinct divisions – ballistics and technology.
Shares on issue,101,761,703
MC at 40 cents $40,704,681
eps 19.09
PE...2.1
NTA.39 cents.
https://stockhead.com.au/this-asx-company-makes-helmets-that-can-stop-machine-gun-bullets-heres-how-it-feels-about-the-huge-australian-defence-overhaul/

[lorraina]

FY 23 RESULT HIGHLIGHTS

Continued to execute on our Strategic Plan (reinforce success, seek adjacencies, and create our future)

Invested in our team to position ourselves to deliver into global markets

Grew pipeline of opportunities to +$375m, with multiple opportunities on foot for delivery in FY24 and beyond

Leveraged attractive sector fundamentals that continue to underpin future growth

Seeking inorganic opportunities to drive penetration into US, UK, EU markets

[lorraina]

 https://www.xtek.net/2023/09/01/bell-potter-report-xtek-armoured-and-ready/

[Ferg]

And in other news the CEO is in Poland and I believe Regal is still selling their stake.  XTE may need to prove itself over a few quarters / half years to get re-rated.

[Sideshow Bob]

And in other news the CEO is in Poland and I believe Regal is still selling their stake.  XTE may need to prove itself over a few quarters / half years to get re-rated.

Looking like might still go sub-30c, and still buying opportunities if one wanted in, or to top-up.....

Buying in a downtrend is good, right?? 

[lorraina]

An excellent contract win.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02720074-3A627453?access_token=83ff96335c2d45a094df02a206a39ff4

[Ferg]

Wow.  That is significant.  It is worth approximately A$39m over the next 4 years, plus potential for another A$71m in the 6 years after that.  That is a nice earnings base.

An excellent contract win.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02720074-3A627453?access_token=83ff96335c2d45a094df02a206a39ff4

[lorraina]

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02725449-3A628364?access_token=83ff96335c2d45a094df02a206a39ff4

[Ferg]

Since lorraina's post which has an investor update there have been some other positive announcements.  A snapshot of the recent announcements (all figures are A$m):

1. XTE to be renamed HighCom
2. Oz manufacturing facility to be relocated to USA to tap into the "buy USA" DoD requirement
3. The move noted above will deliver annual opex savings of $2m
4. As previously noted $39m contract secured with ability to upsell another $61m over the next 10 years to Australian DoD
5. XTE received an urgent order for body armour for $2.2m which was delivered ex stock (speculation is the client is based in Israel given recent events)
6. An existing European customer has placed a follow on order for $1.6m
7. These 2 latest orders were not part of the $375m pipeline previously announced

IMO these announcements show a few things: the Board and CEO are thinking strategically; current worldwide conflicts are providing macro tailwinds; urgent deliveries result in loyal customers, and follow on orders from existing clients demonstrate faith in the product(s).

All in all a happy holder and it didn't take many announcements to see XTE being re-rated by the market - previously I thought this would take a few quarters / half years.

XTE is a small cap so not everyone's cup of tea.  This is not investment advice - do your own research.

Big shout out to lorraina for putting this on my radar.

https://www.xtek.net/announcements/
https://nz.finance.yahoo.com/quote/XTE.AX/chart?p=XTE.AX

[lorraina]

https://urldefense.com/v3/__https:/www.xtek.net/wp-content/uploads/2023/10/MST-Access-XTE-Update-19-Oct-23.pdf__;!!PUVePWy_yMB-Yi4!GGYzV2f31lrPyhVmEYiSItTZvXfWZj_XT5FV-SCZORCKWAsu37cUnJ9YLrz4eSFaCehF72aN-T188RAwiu_anz57Evw$

[Ferg]

Looking like might still go sub-30c, and still buying opportunities if one wanted in, or to top-up.....

Buying in a downtrend is good, right?? 

I am no chartist but if we hold over 50c today, is that significant from a TA perspective?  50 day and 200 day MAs are around 38c & 45c and I'm picking the 50 should cross up through the 200 MA some time soon given the impact of the low SP late Sept will drop out of the 50MA in the next 2 weeks.

Was it a downtrend or an over zealous seller in Regal who couldn't see the fundamentals?  I still wonder have they seen something that we can't?

[lorraina]

This link may work.
https://henslow.com/news/research/xtek/
Figures from it.
...........................2023.................. ...2024.....................2025.
Revenue................$89.5mil..................$ 94.6mil..............$101.5mil
NPAT......................$6.1mil................. ..$.8.9mil................$9.8mil
EPS.........................6cents................ ......8.7cents.............9.6cents
eps growth................................45%......... .............10.3%

[Ferg]

Thanks for that lorraina.

I had a look at that link from the other ST forum but it wanted an e-mail address so seeing the high level summary is great.

Cheers

[Ferg]

Smart guy the CEO.  Scott Basham.  He speaks well.

Vimeo video:

https://vimeo.com/769289367/6b99d905e6

[lorraina]

Tripled the revenue in 2 years.
Now expects to triple the revenue in the next 3 years.!!!