ite expected dollars 1.25, page-3

How do you arrive at the value of the contracts you expect to be signed, eg Razor at $6mio per contract?
The two contracts that were in the 1st half results had a combined value of just $2.2mio.
That aside, when valuing a stock the market looks forward, rather than just the current situation. ITE may well get their remaining 5 contracts into the 2nd half, but they have given no firm indication of any further contracts beyond these contracts.
Given the lead time between project scoping, design and implementation I would suggest ITE will be battling to get any new contracts settled (sales revenue recognised) in the 1st half of 2007/2008. Meaning they may need to rely solely on contract service fees to offset their high cost base. If this was the case then they would most likely report a loss for the first half of 2007/2008.
As for a pe of 40, that is fanciful thinking and would only apply to a tech stock that could convince the market such a premium is justifiable (eg strong track record of growth and future growth prospects)
Given ITE's record, a pe of around 10 would seem appropriate.
For a comparison company look at ADA.
Both companies operate in a niche market with 1st class products - ADA has a pe of 8x.