.27 gone, page-39

from the muns Credit to The Muns @ Sharesceen for this little gem.
____________________

BQT Solutions (BQT)

First I will say this is a *highly speculative* investment opportunity – definitely not for widows or orphans.

In the company’s own words BQT Solutions is “a Global Leader in Mifare Contactless Smart Card Applications, Biometric Access Control, Personal Identification and Data Encryption technology. BQT is Australia’s leading Biometrics Company providing Smarter Security Today, with the most intelligent and innovative high security solutions to suit the strict requirements put on security protocols across the world.”

Yet for all those claims BQT made a $3m loss (before amortization) this past year on only $2m revenue. Usually I would think “just another hype machine that’s all talk and no money - next!” This does indeed appear to be the consensus of most traders and the shares have performed poorly this year and especially last month after a share placement. But BQT could be a rocket these next few months.

Why do I like it?

BQT appear to be finally commercializing their technology in a material way after years of marketing and R&D expenses.

From the Annual Report:
-------------------------------------------------------------------------------------------------------
Revenues
Sales Revenues increased compared to the previous shorter comparative period and overall margins have returned to target levels across the product range. During the year our business has focused on supplying high security products to Government, Defence Departments and Major Airports which take a long time to conclude.
The Company believes that the work undertaken over the past three years will generate significant sales in the near term.
-------------------------------------------------------------------------------------------------------

And from September 17:
-------------------------------------------------------------------------------------------------------
For the past two years BQT Solutions has worked with clients globally, on airport
security systems and currently are in the final stages of securing an additional five international airports from the Middle East, USA and Australia . BQT Solutions believes the work carried out by its offices in London, Los Angeles, Sydney, Shanghai and Chennai will result in many airports around the world using the BQT Solutions technology.
--------------------------------------------------------------------------------------------------------------

And finally from November 22 – just last Monday: ”Worlds first 3D Facial added to Biometric range of products”
-------------------------------------------------------------------------------------------------------
John Genner, Managing Director of BQT Solutions Limited (ASX Code: BQT), “To
continue to be a world leader in Contactless Smart Card Readers, Biometrics and
Encryption technology, BQT will be able to give its global clients additional Biometric security of 3D Facial. This is a major technology breakthrough.”
The BQT range of Biometrics will now include:
• Fingerprint Biometrics
• Iris Biometrics
• 3D Facial Biometrics
When the BQT Encryption devices are added, security of the very highest standard is available. Clients can have one or more Biometrics on the smart card, giving them far greater flexibility and security. The global acceptance of biometrics is now being achieved. Up until recently there was not a stable biometric technology in place. Acceptance has only recently been achieved.

Market Update
BQT is currently working on (many in final stage of conclusion) over 100 projects – world wide. We are finally seeing the security upgrades being specified and implemented around the world. The first to implement security upgrades is Government & Defence. Lead time in this market is long.
The USA is now taking off with the introduction of the new Common Access Card (CAC) or DESFire standard . BQT has worked on this technology for approximately 2 years. BQT’s team met with NASA in the USA this month to ensure the latest upgrades of NASA’s requirement were incorporated in the BQT technology. There have been many changes to the specifications to date.
BQT introduced what is believed to be the first DESFire standard contactless smart card reader into the Gerald Ford Airport in the USA. Currently the USA Governement & Defence has major opportunities for BQT and will justify the 2 years R & D spent to be a leader in the standard.
The China (Shanghai) office of BQT is now established & is introducing the BQT technology to our clients. The potential of this market is greater than BQT initially thought. Our clients in China are currently working with BQT to introduce the BQT product into Power Utility, Taxation, Government Communications and Social Security.
The Middle East market is a major opportunity for us. BQT is close to finalising Defence contracts with the Middle East. Our senior executives from the BQT London office will be in the Middle East this week meeting with Government, Client and specifiers.

BQT sees 2005 as being the culmination of all its R & D and global marketing efforts.

-------------------------------------------------------------------------------------------------------

So, after a long period of investment it appears that BQT is finally beginning to commercialise its products and importantly has some reference sites (eg Bangkok) which should help create momentum for future sales.

But what makes me pay special attention to the above announcements – and prevents me, as hard as much as I might want to, from chucking BQT in the trash can for wannabes - is the relentless and aggressive insider buying of this company – as late as November 19. There were 8 insider buys (and no sells) in the year to September. And a further 3 since then. This suggests that the company is progressing well indeed with its technology and contract negotiations. The Directors, who know the company and its prospects intimately better than I are putting their money where their mouth is.

Also, the company has no net bank debt so should be able to continue operating (without the bankers getting nervous and pulling the plug) for sufficient time for it to start generating positive cashflows from major contracts.

From a timing perspective, the share price has been hammered from 40c to a low of 19c due a share placement at 20c recently to fund its ongoing marketing and R&D effort. But BQT is now trending back up. At 24c, BQT has a market cap of $34 million. IMHO this presents a good opportunity to buy in.

If BQT is successful in winning some major contracts then IMO it will be a multi-bagger. If it does not win some major contracts, it will continue to drain cash and could go bust. My bet is with the former but you decide.

I'd love some feedback on this one.

Disclosure: purchased some BQT today at 24c.