Datong Electronics Share Discussion Threads

[garth] 02/7/2007 09:40

Hi Rivaldo,

Thanks for your comments which are, I believe, pretty much on the button. I've taken a small stake in the belief that these could well see a 30% lift over the next few months. I'll consider adding more if they drift. They represent a modest growth opportunity and relatively low downside, IMO. That's what I'm after for at least some of my AST cash.

Pleased but gutted with AST. 8-bagger over 4-5 years looked almost a cert, IMO - and I would have been happy to wait. Still, its given me some cash to play with ;0)

I tried to buy HYD 3 or 4 times last week - with some difficulty. CAR are in my ISA and I may well move some of this year's allowance to add some more. CRPR is where the largest slice of my SMRT profits have gone. Currently around 240p - 350p-500p my target range, all on the back of Technical Fibre Products divsion. May take some time for the market to notice. Not without cyclical risks.

Small chunks have gone into WLF & CSR - I wonder if we might see some marginal increase in share price between now and Christmas on the back of the IPhone.

SMRT selling out has blown my investment plan right of the water - so I've spread some of the proceeds around and will wait it out a while. Not least because between 5 kids and promotion I'm feeling over-committed!!!

Thanks for your continued labours on the HYD & CAR threads! What's your view of Axis Shield at present?

Kind regards,

G.

[rivaldo] 01/7/2007 11:02

Hi Garth. I've watched Datong for ages now. The results, outlook and potential are all excellent, but the company have stated they're quite heavily second half weighted, and they've also suffered from contract slippage in that second half in the past.

The company does look quite good value on fundamentals, but not blindingly so, and I'd rather not have funds tied up here possibly doing nothing for almost another year in the knowledge that H1 results probably won't be that impressive. I think proof of continued success is needed, so I'll wait and see a bit I think. Just my two penn'orth.

OT : congrats on AST, I was wrong on that one! Though I'm sure you'd have liked to have held long-term. I assume you'll be putting the proceeds into HYD or CAR :o))

[garth] 01/7/2007 10:47

I found this section of the results interesting. Massive growth experienced in the US - part of it from delayed orders. In spite of that they are still looking at continued growth this year. That implies that organic growth this year should be strong enough to equal the value of those delayed orders - and then some. Impressive, IMO, if they pull it off.

"US

Revenues from the US increased significantly by 128% to #6.0m (2006: #2.6m),
benefiting from strong growth in the military sector, reflecting both a widening of our customer base and the introduction of new products, and from order delays carried over from the previous financial year. With a growing brand, further new product launches expected and continued investment in expanding the customer base, we are targeting further growth in the US."

G.

[garth] 29/6/2007 11:59

Good man - many thanks. And just look at the effect on the share price already! ;0)

[tole] 29/6/2007 08:18

All done :0

[garth] 29/6/2007 08:15

Tole,

any chance of adding a longer term chart to the header? Preferably with a volume indicator added?

[garth] 26/6/2007 17:38

Minimal response to the results announced today but they beat forecasts and are on a pe of around just 11x

Court case in the background is, presumably, weighing on the shares but they look interesting, IMO.

Quiet thread - often a good sign ;0)

G.

[tole] 18/6/2007 09:31

Bit of action today..bridgewell offline though - just Wins on the book at the moment.

[tole] 12/6/2007 16:27

Datong Electronics PLC (DTE.L), the designer and manufacturer of advanced high
performance intelligence gathering equipment, will be announcing its Final
Results for the year ended 31 March 2007 on Tuesday, 26 June 2007.

[tole] 17/4/2007 08:50

Bit of a summary from Bridgewell in their revised update last week -

"We believe the market has been pricing Datong to miss its numbers, but strong
US trading has enabled it to deliver over 30% organic revenue growth in
FY2007, while US dollar weakness has chipped away at margins. While Datong
flags a litigation issue, we still believe it is a strong growth story that is now quite severely undervalued. Therefore we upgrade to Buy from Overweight."

They expect PBT of some £1.55m versus previous forecast £1.6m - however have cut 2008e, reducing PBT by circa 10% due to the dollar effect.

One thing I noted however is that regarding the court case - Bridgewll have stated that they believe MMI is suing for an amount of c. £300,000-400,000. Not much in the heat of things imv.

Also highlighted that Datong continues its unbroken growth track record, with stated revenue growth of 25% p.a. since 2003, and over 30% organic revenue growth in this period.

Trading at just 10.6x 2008e which adjusting for cash falls to 8.8x


Date, Turnover, EBITA, PBT, EPS, DPS, PE, NetDebt
Y/e Mar £m £m £m p p x £m
2007E, 9.5, 1.4, 1.5, 7.7, 0.0, 12.6, 2.9
2008E, 10.5, 1.8, 1.8, 9.1, 0.0, 10.6, 3.5

[liarspoker] 05/4/2007 13:25

FD buys 20K today though......

Everything looks nice but too many 'ifs and buts' for me regarding the court case.

[tole] 05/4/2007 12:03

Yes agree and not making any provision is either very brave or very stupid.
Why didnt they reveal it back in June last year when it came to light is a bit concerning also? And that is even when the directors bought in as well.


"Providing an update on ongoing legal action by MMI Research Ltd related to
an alleged patent infringement by Datong and one of its suppliers, the company
said if MMI were to succeed there is a possibility that this outcome could have
an adverse effect on its financial position."

"Datong added, however, that it has not made any financial provision for damages as it believes it has a strong defence."

[liarspoker] 05/4/2007 11:34

The court case is what worries me.....

[cambium] 05/4/2007 10:59

revenue is expected to be marginally ahead of market expectations and
operating profits to be marginally below.

[tole] 05/4/2007 10:49

And there it is - trading looks good in my eyes just the dollar effect as expected. Though never like Legal actions...

[tole] 03/4/2007 09:06

Perhaps a trading statement this week....last years was Thurs 6/4.

[nephie] 27/3/2007 13:09

I dont get it

[anrows] 20/3/2007 12:13

Chartwise this looks bad where's the bottom ??????
Results in June a long way away yet

[hew] 13/3/2007 18:47

Tole, thank you, useful background. I only became interested following the Inv Chron piece a few weeks ago. (Did some of my own research too!) However I have reduced my holding recently to fund a possibly nearer term prospect though I remain in and interested. Suspect given the history (as in the IC) there will now be little share price movement until the June Results, though I shall be keeping an eye open for an April trading statement. (As last year.)

[knowing] 12/3/2007 23:09

I still have one of their Morse tutors somewhere.

[hew] 12/3/2007 13:53

Tole, any idea regarding the history of the Investec holding? Initial provider of capital?

And if it is so, what underlies a move from 45.2% to 45.9% I wonder - unlikely to be a market purchase. Why bother! And why announce it? Is it necessary? Are they market makers?