Datong Electronics Share Discussion Threads

[deepvalueinvestor] 19/2/2013 18:04

Great find. It is encouraging to see others thinking the same thing.

[2baffled] 19/2/2013 16:50

Farm-in .....

[deepvalueinvestor] 15/2/2013 18:19

Checkers, that's right they only sell to govt agencies but are looking at broaden the base. For example, a company moving nuclear material might very well pay up for advanced monitoring technology. I bought more today.

[ceohunter] 15/2/2013 15:45

The directors of Leyshon Resources (AIM: LRL), Amur Minerals (AIM: AMC), Stratmin Global Resources (AIM: STGR) and Dart Energy (ASX: DTE) will be presenting on 28th February

Venue: Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB (Charles Suite)
The presentations will start at 6:00pm and finish at approx 8:00pm. After the presentations are complete the directors will also be available to take questions during a free canapé and wine reception.

REGISTER HERE:

[checkers2] 15/2/2013 12:02

I hold this stock, small position. I would add more if it didn't have such a crummy name, and I am always wary about companies with non-sensical names.

Datong is a city in china?

DVI - do you know if the directors have a strategy for selling to the corporate security market, so could broaden their client base ? Or are the products so classified that they can only be sold to defence departments?

[hezza123] 15/2/2013 09:45

Looks like that 50k trade at 36 yesterday has removed the seller and paved the way forward. Not much stock about now by the looks of it.

[hezza123] 14/2/2013 23:35

Cheers DVI. I shall investigate further.

[deepvalueinvestor] 14/2/2013 19:12

The new contract is an r&d project worth £7.5m so margins somewhere around 40%. However, with such close collaboration you would expect the customer to buy hardware in the years to follow and these give us an 80% Margin. They could only do a few of these r&d projects at a time but the ideal situation would be sell to sell lots of hardware so keep an eye out for these sort of announcements.

Clearly there is the uncertainty of US budget cuts but this latest announcement, combined with £2.5m net cash and a market cap of only £5m makes it look interesting. I would expect most of this cash to be put to use to diversify their business and perhaps spin off part of the software business but I am still waiting for a research note to be produced to give me a better grasp of the numbers.

You need to speak to Bob Liao from Canaccord as he is the guy covering them. The problem with microcaps is understandable lack of coverage. Despite the cash, it should obviously be viewed as high risk due to its small size so DYOR.

[hezza123] 14/2/2013 14:49

Finally taken a small position here, so would welcome any details of your conference call DVI. :-)

Obviously all holders will know this, but for the benefit of anyone else reading, the share price currently represents a 23% discount to net cash asset value and a 33% discount to tangible net asset value.

[checkers2] 12/2/2013 11:39

Hi Dvi, I recall reading it in the annual report, but on further study can't seem to find it. So its either there or my memory is playing up -:)

[deepvalueinvestor] 04/2/2013 19:56

Hi checkers, I know they do things for the us government but wasn't aware of this pentagon clearance issue. Can you post a link? I am hoping to do a site visit at some point.

[checkers2] 04/2/2013 12:25

Thanks for your post dvi.

I have also modestly bought recently into this company - its EV/EBITDA ratio is only around 2. Very low for a company of this nature, and it has quite high Depreciation and amortisation charges which give an impressive cashflow yield.

I have read too that they are applying for clearance to the pentagon, to be special supplier to the US defence market. The result of this application will be in 2013/2014, and with a favourable outcome I imagine will help their sales efforts.

You mentioned you may be talking with the management, do keep us informed!

[deepvalueinvestor] 07/1/2013 20:33

Increasingly warming to the share after the announcement in December. They announced an r&d contract with margins of approx 45% but it is fair to say that they should be able to follow this up with kit orders where the margin is closer to 80%.

The problem with this company is its micro cap size, obvious secrecy surrounding clients (mainly special forces worldwide) and thin research coverage. 3rd party sales are also expected to dry up in 2013 and they may use some cash to diversify the business.

However, as a punt, a £7.5m contract over two years is a massive vote of confidence in a company only worth £5.5m and with £2.5m cash and no debt. A few contracts from our American friends would be helpful as 2013 progresses. It is surely not too far fetched to see the company trading on 15 times earnings if they can keep building the revenues and give us £2m of profit. This would equate to a share price of 240p, or six times your money. Pure speculation on my part but keep an eye out for future deals, especially if they are selling kit.

A small seller knocked the price today and allowed me to add at 37p. Interesting times.

dyor etc

[deepvalueinvestor] 19/12/2012 19:29

I guess the sleepy board reflects the £4.5m market cap and thin coverage. the only analyst covering is away. I will feel happier when I get more detail but I have been adding exposure today as the numbers suddenly look more interesting. let's face it a profit of say £1 million trading on a modest multiple of 8 plus the cash of £2.5 million would double the share price. it is a massive boost that someone has looked at the company and decided to place such a large order

[deepvalueinvestor] 13/12/2012 20:14

Better news today. It promises so much upside but yet to deliver.

[rhubarbe] 02/10/2012 09:58

Well, t' wife and I have some LFD, titter ye not, that we could do with offloading before the Forbes gang erode any remaining value. So being as it's in an ISA, I was thinking about some DTE Oz, on the basis that Oz market has to turn sentiment wise sometime and we are patient, though mortal.

DTI IPO (I may not have the cash required) but I will buy soonish after in my SIPP if some of my dogs show any signs of life befire then. Otherwise it'll be a tough decision on what to sell.

[pigeon1] 01/10/2012 22:35

You guys buying dart oz or waiting for this listing?

[5huggy] 01/10/2012 20:22

quite right Rhu - except for those of us who know!