Undervalued Data Winner Potential

K2FLY (K2F)
SUMMARY ANALYSIS
MCAP: $5.59M @ 11c
Business : K2fly delivers complete infrastructure asset management through its industry-specific software and services

K2F’s mission is to be a “digital enabling partner” for Tier1 asset intensive companies. It does this through its INFOSCOPE software platform.

Essentially INFOSCOPE provides a secure and powerful data management platform catered to the Resources/Energy/Infrastructure/Environment industries for comprehensive management of tenements, land and infrastructure, removing silos of information sitting around various parts of the enterprise providing a wholistic insight through consolidated and connected data for more sustainable outcomes. INFOSCOPE integrates information on Stakeholder Engagement, Property Access, Tenement Administration, Cultural Heritage & Environmental Monitoring and more.

The INFOSCOPE platform was acquired and already had an annual business revenue of $1.5m with EBIT of $400k and customers the likes of Fortescue, Metals X, Westgold Resources. The INFOSCOPE platform is operated as a SaaS (Software as a Service) recurring revenue model.

What is likely to be transformational is the inclusion and porting of INFOSCOPE underway into the SAP S/4HANA cloud based enterprise resource planning (ERP) ecosystem. Once completed in February 2018, INFOSCOPE will be able to be sold by SAP globally to all their resource clients around the world. Currently 17 of the top20 global mining companies run SAP and there are almost 800 mining companies globally on SAP. Hence, this is significant recurring revenue opportunity for K2F in 2018 and beyond.



What to like about K2F?
* Under the radar stock

• Mcap of $5.6m grossly undervalues its business position [ already revenue generating] and its global potential with Infoscope post-SAP integration

• Expected re-rating once Infoscope porting into SAP completes in February 2018
• Revenues are modest around $1.5m per annum but cash burn is also not high [ A CR could be expected though to fund working capital IMO but a CR if properly done would not pose much of a dilution given the extremely low mcap]
• High SaaS margin 80%
• Reseller agreements with major global companies including GE, ABB, Kony, AMT-Sybex
• Very importantly, the man behind the wheels, Brian Miller CEO and Executive Chairman understands everything about asset management, being a founding member of the Institute of Asset Management (UK) and a co-founder of AMT-Sybex in Europe which was a €55m per year business before being taken over by Capita. Brian influenced the development of the initial BS5750 standard for asset management within the UK energy sector.

In conclusion, IMO it is hard to go wrong with a $5.5m mcap business and to me , this is like CCP Technologies (CT1) when I got in at 1.8c with a mcap of $5.5m and now at 2.8c with a mcap of $8.6m.
I should think this should be already doing 18c and IMO potentially scaling to 25-30c with the SAP announcement.
DYOR