If you manufacture your heat pumps in China, then it makes sense to also sell them in China. The challenge in the past was price, but a number of businesses have been caught out purchasing inferior heat pumps that cost them more in the long run through repair/replacement. Some of these dissatisfied customers may switch to QTM in time which is now looking to market products in China.
The high end medical products business has some interesting reach developing in the middle east, Europe,the US and Asia.
The change in subsidy from the government and its impact is not so material in the context of a growing business overseas (heat pumps) and the fast growing medical products area. Theimpressive revenue for FY2009 was partly a case of bringing forward sales that would probably have eventuated anyway. Longer term, growth in foreign markets for the heat pumps and the medical products area in general should smooth out revenue.
This is a well positioned company in the context of renewable/smart energy and aged care/medical services. Two very attractive sectors.
QTM Price at posting:
16.5¢ Sentiment: LT Buy Disclosure: Held
