Team TSN, it has been a while since I have posted here, thank you all for your commentary, you can’t even put a price on the amount of information received via this thread, both positive and negative. It allows everyone who participates in HC to do a bit more analysis than they otherwise would or should. I have also seen a lot of new posters that have come to the forum since the Mphasis deal, which is also great and shows we are slowly getting “found” by other market participants.
1 - TSi wins large ATM and/or Mobile Kiosk contract (500+)
2 - TSi acquires an exisiting fleet of ATM's on the cheap
3 - TSi wins a proposal to manage a banks fleet and take a clip
4 - TSi gets bought via trade sale in late 2016 or early 2017
Well oh my gosh, not only are we looking to hit $55M or greater revenues now and not only have they achieved 1, 2, 3, but TSi have absolutely smashed it out of the park. The previous large ATM contract we have seen from TSN was 800 ATM’s (11/9/14) and then in March this year, TSi won an absolutely monstrous contract (11K ATM’s) via the deal with Mphasis. They have also recently won a 9K new ATM strategic tie-up and rollout with SREI. They have also achieved their first “milestone” e-surveillance contract for 500 sites for a 5-year period and additional trial with Laxmil; and still with very huge upside in the ATM, e-surveillance, power management, managed services and debit card services areas, it now also appears TSi are on the verge of something quite extraordinary in UPI, which has potential to revolutionize the payments industry in India as we know it – “active discussions with a major bank for exclusivity of UPI transaction reconciliation, but they are also the first mover advantage for replication across 26 bank relationships”.
When I last posted on the TSN forum, the stock was at 1.1 cents. Since then it has been as high as 4 cents twice and has seen a recent low of 1.7 cents. Yes, we did hit 4 cents twice and we didn’t keep going but you can see that traders who were new to the stock were trying to get a slice of something they didn’t really understand, which clearly resulted in them (well I would assume most of them) cutting and running for losses, with their tails between their legs.
We had a new major group join the register, who appears to have just been a trader and potentially got very lucky with their timing. That group may also appear to still potentially be selling as Marty has said earlier, but as the old adage goes “they will be caught short soon enough”. We have also had another major seller who was extremely instrumental in getting TSN together from the start (back in 2006), so he probably deserves to take some off the table? So all of these things have been an impact on the “short term” share price and not how the TSN/TSi team are running the business; and certainly not a reflection of what I can only imagine is going on behind closed doors; pipeline discussions, TSi agreements, and so on and so forth.
Now, this is where it gets good.
The recent corporate presentation is the best I have seen delivered by this company and one only needs to look at the first page to understand why – “The Indian Financial Revolution”. If that doesn’t excite you then you clearly are a hard person to keep happy. How about the Indian middle class will be nearly 600M by 2025? How many people did the census this week in Australia? Wow, 600M is a big number of middle class. That means lots of cash, lots of smart phones and lots and lots of transactions. Annual run-rate right now is $55M AUD for TSi (page 5). A massive US$3.3Bn estimated for the Indian ATM deployment related services market by 2020, and TSi are 7% of that market currently in 2016, and will be a larger part of it once they hit 50,000 ATM’s. The total market opportunity for TSi by 2020 is in upwards of $10BnUSD if you combine all parts of their business. However, this figure does not even include UPI. Clearly this is a huge market that TSi could tap into and as Tony and TenX have alluded to on page 13, we are already seeing hints of TSi’s involvement.
Ok, so we have just seen a capital raising to institutional investors (and the management of TSi) for a total of $1.7M. Let me say that again. TSN have just raised $1.7M in real money to INSTITUTIONS (fund managers with very, very, very deep pockets) on the basis that TSN will use part or all of those funds to negotiate terms to acquire the remaining 75% of TSi from the other shareholder of TSi, CX Partners.
Now $1.7M may be quite small for these funds with deep pockets, but don’t you think this is almost a “dip your toe in” type raise before the real fun starts? Well it seems that is the case for me anyway. I infer this as … “we’ll give you some money now so you can execute an agreement to take out CX Partners stake of TSi and on the basis that you achieve this in timely fashion, via at least an agreement to purchase TSi at a set price, by a set date, then we will assist you with buying the stock in the market, taking out any big sellers and providing you money that you need to achieve the 100%”. As Tony would say – WAKE UP MARKET.
Does this also make sense to anyone else? Well it does to me and I am very comfortable knowing the heavy lifting is going to be done by institutions now, whereas it was us Mum and Dad investors for so long. The pain and agony we endured while all those sellers were dumping stock down to 0.3 and 0.4 cents. Now we have deep pockets bidding the market and saying “come and hit me, I dare you.”
Now just something minor, I posted my own valuation in October last year at 2.3 cents to 2.5 cents -http://hotcopper.com.au/threads/tsn...e-on-tsi-metrics-alone.2622992/#post-16246541 – on the business as it was then when TSi barely had 2000 ATM’s and 200 bill payment kiosks. I am not even going to start thinking about where this could go once we have 100% of the business with all of these elements that we now have since the Mphasis deal, but what I will draw your attention to is that I mentioned the ~$18M in debt facility we have, which I believe is still undrawn. Don’t you think now would be a great time to draw on those funds as part of the payment required to CX Partners for their 75% interest in TSi? And with the 35 odd banks they have as clients, wouldn’t they want to be part of this transaction also? So anyone thinking of a big equity raising causing huge dilution might want to start thinking about what the company may actually do here on the debt side of things, especially considering that the main guy (Gary Foster) who owns circa 10% would want what is best for his own long term interests, considering he setup this business from scratch back in the noughties. Remember, he is the one that has does the hard yards here and deserves the big prize at the end and in saying that, a limited dilution big prize at the end. We are just there to keep in company along the way!
Thanks to Tony, Marty, TenX, Dr, qjc, castle, ezy, seatback, jimbov, jocko, more recently jonkey and the rest of the long term supporters who provide updates on a daily, hourly, minute by minute routine. Those who read enough of your material got into TSN at a very nice price, long before the Mphasis deal was announced and subsequent deals thereafter, and those who continue buying at these levels will only do well also. Think about the churn between 0.3 – 0.5 cents, does it not remind you of the current churn?
This is all food for thought and obviously my own opinion.
I am now off overseas and won’t post here for a while again, I just wanted to check in and give my 2 cents. Maybe we can all meet at the 20 cent party as espoused by a few on here, Castle? Or was it justobserving? Can’t recall.
And as I have said before – GLTALTH (Good Luck To All Long Term Holders).
FTTT.
TSN Price at posting:
1.8¢ Sentiment: None Disclosure: Held
