HT8 has grown at a unstoppable pace having achieved a 200+% of growth YoY to over $40Mthis FY. This is great news to all the holders. As how we should expect its upcoming announcement on profit etc., here are some my points:
·The company has already turned profit and reported $1M profit last FY, so I expect that it will deliver another profit year without doubt.
·The company during 2020 launched Pro-Hygiene range and it was clear that a nice portion of the profit was generated from that opportunity. The company should be congratulated because it showed the management’s ability to pivot and seize opportunities whenever they become available. As per company’s announcements, the PPE sales are now dried up, but the core tech sales are growing. My interpretation is that margins will become normal or reduced due to the short term high margin PPE products are no longer possible. As a matter of fact, these masks or hand sanitisers are now in over supply and it is a good idea to exit anyway.
·HT8 is still a micro-cap company despite of its growth, personally I believe it must scale its revenue to a higher level say $100M or so before the institutional boys take notice of it. As such, HT8 must get its revenue to a decent level first before it is able to make more profit. Without scale, as a listed company in an ecommerce space, you are still nobody even if you can make some profit. Furthermore, profit will come through when HT8 can command more buying power from its market share.
·The reason we, as investors buyingHT8 share is not for dividends, we are here because we believe that SP will be up higher, much higher than when we bought. The SP will not improve much if HT8maintains its revenue or grow little on revenue even if it can generate more profit for reason stated above.
·Ecommerce – although is growing at a rapid rate, is still a very competitive battle field. In order to gain sales, I believe HT8 must first win sales from competitors, so it cannot afford to make large margins. The company recently recorded more than $1M sales on eBay, I can bet that it will not make big margins because you will have to compete against other sellers first. From listening to the CEO in recent webinar, it was clear that the company has very good relationship with the suppliers and is able to claim rebate; however, if HT8 has no buying power, then there is no rebate to talk about.
My conclusion: we should be all happy if HT8 can continue to grab market share and improve it revenue so it will be scaled to a level where the fund managers will start treat it seriously. Its profit will not be as higher as some of fellow investors prediction. Having said that I certainly feel that the company will make a decent profit since it was on a profitable track for a period of time now. In terms of cash flow, I agree with @Daz08 & @CaptainSteve that the company must acquire more inventory to ensure more sales, so it is almost predictable that cash flow will be impacted in coming months. Overall, as mentioned by@$tockfellow many times, that the company is under the radar and under valued, so it is almost a nice secret for a while for us as early holders. Good luck fellow shareholders and let’s wait and see.
(20min delay)