Saturday, January 27, 2007

Update on TechnoDex

Last July 31st 2006, I blogged about this stock making a bold earnings projections on the eve of its IPO: TechnoDex Bhd. Anyway, as i was doing some house cleaning, I remembered this posting, I thought do an update on this stock and check out how the company performed since listing. And most of all, compare the fancy earnings projections versus the actual earnings.

TechnoDex expects net profit of RM7m for FY07
By Gan Yen Kuan

Mesdaq-bound TechnoDex Bhd, a business technology provider specialising in open source solutions, expects to achieve a net profit of RM7.02 million on the back of RM12.46 million in revenue, for the financial year ending June 30, 2007 (FY07).
The projection represents a 60% jump in revenue and 40% in net profit, compared with the targeted revenue and net profit of RM7.78 million and RM5.01 million respectively for FY06.
TechnoDex managing director and chief executive officer Nigel Lee said the projection was based on the wide interest in the company’s products. He said that the company would leverage on its matured technology platform and products to boost sales.

Quarterly rpt on consolidated results for the financial period ended 30/9/2006

That was the quarterly earnings for TechnoDex's 1st quarter fiscal year 2007.

It recorded a sales of only 2.401 mil. And its earnings 1.022 mil. At such a pace, annualising these numbers, we are seeing a potential seals of 9.6 million and most of all a net earnings of only 4.088 million.

Which makes one wonder. How is this company going to meet its bold pre-IPO satetements? How is it going to meet a sales target of 12.46 mil? And most of all, how to meet net profit of 7.02 mil??

:s28: :s28: :s28:

Anyway, I had a look at its earnings notes. The following comments were interesting in my opinion.

  • The Group’s decrease in profit before taxation by 61.52% principally relates to the lower revenue invoiced during the period. Consistent with the nature of the Group’s activities, the Group bills its customers upon attainment of the agreed milestones.

And this is how the company rates its prospect for the year.

  • With the expected increase in awareness of Open Source Technology and its advantages in market, and the Group’s commitment in undertaking its expansion strategy, barring any unforeseen circumstances, the Board is positive of the Group’s performance in the financial year ending 30 June 2007. TechnoDex® Platform is expected to continue to be the significant contributor to the Group’s revenue in the financial year ending 30 June 2007.

Stay tuned.