Good Morning Folks. It has been a while since I wrote up some...

Good Morning Folks. It has been a while since I wrote up some commentary on HT8. Interesting reaction to Monday's announcement.

The Quarterly Report was bitter-sweet. Due to the reduction of COVID-19 case numbers throughout the country and the easing of restrictions, HT8's PPE sales reduced drastically. It is important to remember that HT8 is not a PPE company. It is at it's core an IT and Consumer Electronics company. And as such, it is very good that the company has opened the curtains to unveil the Sales Figures to show the true split or Revenues.

Looking at this closely, and referring to the commentary in the Quarterly Report that IT/CE Sales were growing, I was pleased. After all, this is their core business. Today, we now know that this Division experienced 14% growth. And the company expects this growth to continue and to surpass the short term revenues from the PPE Sales.

One thing to note is that the company was able to successfully integrate a new line (PPE) in very short time, and take advantage of this short term opportunity. Suggests to me that the Team has the nimble aptitude to be successful in Mobile/Gamin and Home Appliances.

Anyways, lets focus on the core. IT/CE at 14% growth last Quarter brought in $9.56M. Assuming a compounding 14% growth Quarter on Quarter as Amazon continues it's growth in Australia, and the online shopping shift, HT8 may be able to achieve $16.5M revenue in IT/CE Sales within 4 Quarters.

Looking at this Financial Year, with $19.4M in Revenue already, $40M looks certain now. Did you know that the company is currently trading it's shares below it's Market Cap? Again, I have said this before, but HT8 is very undervalued.

Inventory is up. IT/CE Sales (it's core business) is up, and the company has reported it is now CASH FLOW POSITIVE.

I have written in my others posts about PE Ratios. So I will do it again. For the record, most of HT8's peer competitors on the ASX trade with PE Ratios of between 30 and 60.

As it stands. Let's perform this exercise on a conservative model. $40m Revenue (likely result on conservative side). Profits $3M.

EPS: $3M/255M Shares on Issue = 0.011765
PE: 0.155/0.011765 = 13.2

If HT8 gets valued fairly at 30 x PE, the share price will yield $0.35. Hence, we are trading at about a 50% discount to what other ASX peers in the same category are being valued at on current numbers.

That said, I see growth ahead. In my opinion, the business does seem to be highly driven to increase it's revenues much higher. For now, the company in undervalued, and I think some savvy investors who have analysed the Quarterly Report and today's figures can see, that although PPE Sales are down, the Sales that matter most (the core IT/CE Sales) are up, and this is a good thing.

Happy Australia Day for yesterday too. Have a good day. All my own opinion.