Qtl seems to be strengthening yesterday after a retracement from 5.5cents in the last week or so to just under 4 cents early this week. Iguess everyone thought that qtl is a tech stock and with the reporting coming thru it must be showing a dreadful position like so many other tech stocks. In my earlier posts I have mentioned that qtl is not a tech stock, tech companies is only 1 part of their market and customers. It is definitely not a tech stock but it supplies equipements to provide broadband internet- again qtl has not expenditure to set up the network ie it is not a tech stock. It takes equipements from someone like alcatel and then on sell to telcos, retailers such as Harvey Norman and then to customers direct. Broadband is becoming popular as a second phase to the internet development. Now that most people have internet, they want to progress to the next level ie excess a lot of info in the shortest space of time. Braodband can do this and is starting to be promoted in the market- customers will require the equipments to broadband and this is where qtl comes. So it looks like a big market in the next couple of years.
Back to the quarterly report, qtl actually had a good report. the Ningbo project is on track and qtl is expecting to meet or even beat profit forecast ($16m in sales) expectation for this year- now that is very rare in the current environment, so qtl is looking good. Sales for 9 mths at $12.6m is better than presvious quarter of $8.2. The Harvey Norman venture is progressing very well and we should see the packages, with qtl equipments in HV out very soon, so that would generate more income- $1m for the quarter expected- again very good. Finally the MD mentioned "We are finalising a number of exciting developments
which will ensure that our impressive growth rate continues into the
next financial year- I like this statement very much.
Previously I thought that qtl should value at about 5.5 cents (high for year has been about 9cents and lows I think 3cents) but that was before this quarters activities and purely based on my opinion looking at their business plan and past activities. I think with more information now there is a potential for up to 7cents in the short to medium- I just felt that it has all the ingredients that are necessary to be successful in the bradband market at least in the next year or so, unless off course qtl does something stupid. There has been valuation of 10cents and above but I think we need more info to justify that level if at all. Time will tell. Please research and see if you agree.
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