Broker report. Target 25c +, page-2

Linius Technologies Limited (LNU) listed in March 2017 with an exciting patented video search and re-compilation technology, but no product or customers.Traditional search engines cannot automatically crawl videos, so have to rely on text data associated with the video. LNU has invented and patented the Video Virtualisation Engine (VVE) which indexes, analyses, and tags each frame in a conventional video and transforms it into a fully searchable ¡°Virtualised Video¡±. This allows a hyper-personalised single video reel to be compiled on-the-fly from an infinite number of source videos applying the users¡¯ bespoke search criteria. Each reel contains just the footage the user wants to see. Fully automated and repeatable, it can be a personalised video channel. Costs to serve are remarkably low.Commercialisation Begins šC Set to ZoomLNU has announced a new product šC ¡°Whizzard¡± for the booming video conferencing and higher education markets, available to Zoom, Webex and Microsoft Teams users. Zoom and Webex represent 52% of the world¡¯s video-conferencing market with millions of users. Users can search and compile video content from recorded meetings and lectures held within these video-conference platforms.LNU¡¯s partner LiveTiles (LVT) will co-market its¡¯ white-labelled version ¡°LiveTiles Smart Video¡± to its 1,100 enterprise and higher education customers targeting Microsoft Teams and Zoom users. The first deployment to a large Australian University has commenced. LVT expects strong interest.Sports, Business News and Security ready to go¡ñ Racing.com deployment now 12-mth in. Being expanded.¡ñ Australian basketball - NBL to launch December. NBL incentivised to introduce international basketball teams / orgs.¡ñ Indonesian soccer šC SportsHero to re-launch Feb 2021.¡ñ UK / Euro football šC partner Swanbay in discussions with major Sports organisations. Golf & other sports possible too.¡ñ Business news šC partner Grafa¡¯s launch is imminent.¡ñ European Defence / Security application šC pilot continuing.Recommendation & OpinionBased on our research and discussions with LNU¡¯s partners, we are confident in the technology advantage and large commercialisation opportunities (especially post-Covid).We have modelled potential revenue of $21m in FY22 and $60m in FY23 but a wide range of outcomes are possible.Investment risk is high as the business model(s) are not yet proven. Potential user numbers and TAMs (total addressable markets) are huge. We initiate coverage with a Speculative Buy / High Risk recommendation. Our valuation range based on 3-5x FY24 revenue (i.e. Year 3) is $0.25 to $0.35 per share. We set our 24-mth price target at the lower figure of $0.25.