Hi,
I highly recommend all newbies start with the reading the Independent Research Report dated March 2014 below. Note, TSI India have come a LONG way since then.
* Corporate History/Overview - Refer to pages 1 & 2 of the Independent Research Report dated March 2014 below.
http://tsnltd.com.au/wp-content/uploads/2011/08/TSN-Research-Report-March-2014.pdf
* TSI India - The company has already established strong sound relationships with major Indian banks, Utility Co's and Financial Institutions - As per company website
http://www.tsiplc.com/our_clients.asp there are 9
'key clients', however if you take note of the May 2015 Corporate Presentation there are a few more high profile clients not included on the company website. Presentation highlights over 230 million plus customers on their databases collectively. * Note, this excludes current agreement with one of the top 10 IT companies in India.
* CX Partners own 75% of TSI India.
* TSN now has a 25% equity interest in TSI India's business.
* CX Partners are funding the entire ATM/Bill Payment business as a result of the approximate 75%/25% deal. Refer to the May 2015 Corporate Presentation dated 15/05/15.
* TSI India had achieved gross recurring revenues of A$4M for the quarter (as of 15/05/15) - that was almost one year ago. Should we see those numbers x four quarters would equal AUD$16M per year in gross recurring revenues. My view is that gross recurring YEARLY revenue should now be somewhere close or over $20 million per annum.
* TSI India has aligned its strategy with the Reserve Bank of India of 'banking to the masses' i.e., to bring in another 700 million people into the banking system.
* TSI India ATM Business - Business growing and looking to expand opportunities. As per latest Half Yearly Report dated 25/11/15 the company highlighted that TSI India had 2000 ATMs installed & operating in India. Note, there are 300 ATMs to still come online to equal 2300 ATMs in total from contract/s refer to September 2014 announcement. As per announcement dated 15/05/15 TSI India highlighted that they're rapidly approaching 100 million transactions per year. Prior to the 21/05/2013 Shareholder Presentation, TSI had a little over 1000 ATMs on the market. The Shareholder Presentation dated 21/05/2013 highlighted that of the Indian outsourcing companies TSI had ~9% of the market. With new 11,000 ATMs agreement has this now increased to 15% or possibly higher?
* TSI India Bill Payment Business - TSI India now have 400 Bill Payment machines in India (with new 200 E-Kiosk contract awarded in July 2015). The Bill Payments Business currently makes up approximately a little over 10% of TSI's business, good scope and potential for strong margins with strong opportunities for expansion, which includes the field of mobile payments.
* TSI India's objective is for a trade sale. Possible exit date for a trade sale is less than 12 months away. Refer to announcement dated 16/04/13.
* If TSI India don't achieve a trade sale in that time window then an IPO is on the agenda. Refer to announcement dated 16/04/13.
* As per 2014 Annual Report, TSI India achieved cash flow positive level of sales from business operations. That was almost two years ago.
* TSI India is starting to win larger ATM contracts. Existing bank client relationships are rock solid. Many contracts have been renewed with existing bank clients. I've previously highlighted that on page 4 of the Independent Investment Research Report, the research team highlighted that according to TSN, banks are no longer looking to award contracts for less than 100 ATMs. That figure has now been bumped up to blocks of 500 plus, with an execution period of 6-12 months.
* Transaction fees approximately AUD $0.20c based on numbers taken from Operations Update dated 13/04/15.
* AUD $18.5 million facility in place. The AUD $18.5 million facility was based on AUD $1 = 54 INR at the time. Refer to announcement dated 14/08/12. The company was able to secure this line of credit with only 815 ATMs at the time (refer to 2012 Annual Report). They had 100% ownership at the time but that ATM figure is now getting close to 2300 ATMs but at 25% ownership (excludes the recent 11,000 ATM agreement).
* TSI India have measures in place to improve margins. As highlighted in the Operations Update dated 20/03/14, "TSI India believe cost reduction initiatives will assist in addressing margins as the business and ATM market expands".
* Share price today sits at $0.028c.
* We have a market cap today of approx $40.45M.
From the recent Corporate Presentation dated 15/05/15
* Banking Opportunities: Opportunity to offer 100 plus banks their new leading technology. ATM networks, systems, payment services, card issuance, card management and card products and mobile payments. That's a total of 7 opportunities that the company has yet to tap into!
* Payments Opportunities: Corporate payments, m-commerce, easy electronic solutions, banking and payment services. The stand out for me under this heading was that Corporates are seeking rapid deployment of new products and services to capture these markets immediately. In other words it's a HIGH PRIORITY focus for them!
The businesses that are up and running at the moment for TSI India are only:
* ATM deployment for 3 Indian bank clients. Note two more bank clients have now been added to the company's website (DCB Bank & Andhara Bank), however no announcement in relation to these two clients has been formally released by the company.
* Bill Payment/Kiosks for 7 high profile clients.
TSI India should are most likely bringing in close to 100 million transactions in total per year now at an average transaction fee of anywhere between $0.15c to $0.20c depending on the machine, sites, location and clients.
Products that TSI have ready for the market (refer to company website):
* E-surveillance
* Power Management
* Pre-paid cards & Card Management
* POS Terminals
* Loyalty & Reward Programs
* Automated Electronic Journal (Refer to case study in the May 2015 Corporate Presentation)
* EJ pulling & Remote Screen Management (Refer to case study in the May 2015 Corporate Presentation)
Potential business opportunities:
* Manage existing or new banks ATM networks.
WE CAN NOW TICK ONE CLIENT OFF FOR THIS SERVICE.
* Buy out existing or new banks ATM networks.
* Smartphone Technology
* Big data driven MIS Systems for Analytics
* Card Issuance
* Payment Services
* Card Management
* Card Products
LATEST AGREEMENT WIN FOR TSI INDIA AND MY PERSONAL THOUGHTS ON THIS AND THE BUSINESS MODELS/SOLUTIONS THE COMPANY HAVE READY GOING FORWARD....
* TSI India are to manage and operate and existing network of over 11,000 ATMs.
These are ATMs that are already on the market and operating!
* TSI India have signed an agreement with one of India's Top 10 largest and leading IT companies open for TSI India to manage their existing 11,000 plus ATM fleet.
* This is important as it's now becoming evident that the company have an aggressive plan of not only winning new contracts, renewing contracts, but also moving towards
larger size expedient ATM expansion. The leveraging power that TSI have for future business opportunities is enourmous. The foundations are in place. This latest agreement was an important signal to me that the company are active in looking to progress and expand this business expediently. The company have CX Partners by their side to them help leverage what they're aiming to achieve: strong expansion of the ATM side of business and they now have the funding and cash flow in place to help them materialise this objective and the contacts to reach a very very broad market.
* I believe this kind of agreement may only be the beginning. Do you think TSI wouldn't be able to
'replicate' this business model out across other potential companies with ATMs that are looking for an experienced ATM outsourcing company with a world class platform to manage these? This is a platform we are talking about that has just increased the size of ONE part of their business by 5.5 times its previous size!!
* There's nothing to say this same business achievement can't be replicated across to what TSI are working diligently on and towards with the current B-Pay Kiosk business model they are looking to present to other Utility companies.
* The there's the e-surveillance / power management side of the business. They already have these systems installed across their very own 2000 ATMs.
* I have all the patience in the world to wait for the specifics of this latest 11,000 ATM agreement to come out. That's not important FOR ME right now. What's important is how rapidly they've been able to increase the numbers across ONE business segment. I wouldn't take this lightly folks. Based on what I've researched over the past 3 or so years, once the magnitude of this agreement sinks in, I believe it's truly going to blow the lid off the market imo. Not just the ASX but the HUMONGOUS space they're operating in. IMO, the company's current fleet could easily increase to 50,000 in a very short time if this agreement is anything to go by. For that we'll have to wait and see, but going from 2000 ATMs to 13,000 ATMs is not something that is achievable without an experienced world class team or technology.
TSN THE SHELL - 100% OWNERSHIP...
* TSN (the shell) - the company is reviewing numerous business opportunities to leverage the strong relationships they have formed over the years with clients and Indian market. Refer to the May 2015 Corporate Presentation.
* TSN has no debt. Refer to latest quarterly dated 29/01/16.
* And as of the 29/01/16 TSN had cash of A$2.095M.
Trip back to 2010 - Refer to 2010 Annual Report.
* In 2010 TSN owned 100% of the ATM/Bill Payment business.
* TSN had achieved gross revenues of A$1.8M for Q210.
* 9 million plus transactions were going through the business per quarter = $36m transactions per year.
* They had about 370 installed ATMs in India.
* Share price at the time was approximately $0.038c.
* They had a market cap back then of approx $45M.
* Transaction fees were approximately AUD $0.15c.
* The company had no debt.
* And as of the 30/09/10 they had cash of A$4.5m.
MY VIEW OF THE COMPANY'S FAIR MARKET VALUE....
Based on current business alone I believe TSN should easily be valued at 8-10 cents today.
Now that TSI India have signed an agreement with one of India's Top 10 largest and leading IT companies open for TSI India to manage their existing 11,000 plus ATM fleet, my 'fair market value' is now sitting at $0.25c even without the specific details. The value for me lies in the world class technology the company have been working on for many many years. It is now revealing what's actually possible. Not potential but what's possible. That's purely my opinion and why my attention remains on the company's bigger picture, so please do your own research.
Hope this helps.
Tony
