HT8 - GROWTH STORY, page-318

Good Evening Folks. Great to see some new faces here, and it is encouraging to see that the market is starting to see that HT8 has been and continues to be highly undervalued. I created this GROWTH STORY thread a few months back, following an earlier thread titled TURNAROUND STORY. The intention was to share my thoughts and encourage thought provoking discussion, which could give us a meaningful way to value this company.

Over the last almost 8 months, early investors had to hold strong conviction. For me, I firmly believed in my research, which indicated to me that HT8 should have been valued at least 26.5cents. As time has progressed, so too has the company's results, all of which are UP. And my new share price valuation has increased accordingly. And as we receive more financial figures, I will continue to share my fundamental analysis.

The trend is pretty clear. Driven by a smart, cost effective, and fluid business model, the company has turned over RECORD REVENUES in recent months. Here is a snapshot over the last 4 Quarters.

Q1 = $2.3M
Q2 = $3.2M
Q3 = $6.6M
Q4 = $9.8M

In the last 12 months, revenue has grown 326%. Phenomenal. Alongside this, the company is turning over healthy profits.

On most recent figures, the company is annualising at Revenue of $40M & Profits of $3.5M. I believe the Oct to Dec Qtr will yield another record Quarter, driven by:

Prime Day Sales records in October
Black Friday & Cyber Monday Sales in November
Christmas & Boxing Day Sales in December
Continued growth of Australia's use of e-commerce platforms such as Amazon, Kogan, EBay etc (all of which HT8 sells it's products on).

My thoughts are that we will witness another RECORD QUARTER. Probably in the $11.5M to $12M range. Yielding profits around $1M. Some believe these numbers will be higher. Great if so, but I like to stay conservative.

What is a fair share price for $12M revenues and $1M profit?

Other E-commerce companies on the ASX carry PRICE TO EARNING RATIOS RANGING FROM 50 x to 500 PE.

If we take the most conservative PE Ratio and use a heavily discounted number of 30, our share price comes to a value of 47cents.

Hence, I believe that a share price of around $0.50 is a very conservative share price value for HT8. One could argue that given the company is holding a lot more inventory than previous, the share price could be much higher.

Some other things I would like to point out:

- Amazon, EBay, Kogan, Groupon, and other e-commerce platforms are booming. As they grow, HT8 grows.
- Revenues and profits are growing Qtr on Qtr and show no signs of slowing down
- CEO owns a major stake over circa 35% of the entire company, which means he has a very strong vested interest in its performance
- Top 50 Shareholders own circa 80% of the company
- The company is valued at a very low and modest market cap of only $53M

All in all, the company remains highly undervalued. If the company can display a clear path to continued revenue increases, and continue to deliver very strong results, I expect to see continued share price growth.

For now, based on my estimates for this Quarters revenue, I believe a conservative share price is $0.50 at a minimum.

Recent trading suggests the market is starting to realise this company's potential. Is it UNDERVALUED? Yes, it is in my opinion. My conviction remains that this company is highly undervalued, and is performing very well. It is early days, and as such I look forward to continued strong growth and shareholder returns.

All my own opinion and not financial advice. Just my thoughts.

$tockfella.