VR1 Research Note, page-2

Just WOW.

I read through the 27 page research document last night a few times.

The research team used a DCF methodology to come up with the current target base case valuation of 12c and an optimistic valuation of 20c.

The valuation for this year is based off a free cashflow estimate of just over $6m for 2025.

Free cashflow is expected to rise to $29.4m by 2029. This is insane!!!

Clearly the analyst who traveled to meet management in Italy has had the opportunity to dive deep into the numbers.

The analyst makes the following comments:

"Looking ahead, Vection is projected to achieve positive EBITDA of AUD 7.26
million in FY25, marking a major turnaround driven by scaling revenue streams
and operational efficiencies.

By FY26, EBITDA is expected to grow further to AUD
12.8 million, with FY27 projecting a robust AUD 18.34 million, representing
consistent year-on-year growth.

Leveraging its position as a first mover in AI and XR for SMEs, the Algho platform
is projected to achieve an ARR of AUD 100 million by FY31, unlocking significant
value for the company.

These projections demonstrate Vection’s potential for
sustainable growth and long-term profitability. The company’s success in the
defense sector and its expansion into other industries highlight its ability to deliver
mission-critical and data-sensitive solutions. With a growing customer base and
global market reach, Vection continues to scale its solutions and strengthen its
leadership in AI and XR enterprise applications."

For those here who are about long term investing and NOT trading, you need to really take a serious look at the numbers here.
The analyst states:

"Cometa aims to scale the deployment of Algho across 500 institutions, generating an expected A$3.6 million in subscription revenue by FY25. This project demonstrates the transformative potential of VR1’s AI-powered solutions in the education sector.

Total revenue for FY24 reached AUD 32.82 million, and we project revenue growth to AUD 51.50 million in FY25, AUD 60.50 million in FY26, and AUD 73.00 million in FY27 (forecast provided by analyst). This strong growth is bolstered by strategic partnerships and the expanding application of the Algho platform in key sectors such as education, healthcare, and transportation."

Let this sink in. The expect the Cometa partnership to deploy across 500 institutions generating A$3.6m in ARR by FY25.

For those that have been around for the last 2 years, you will recall early on that management provided presentations comparing the business to Altium. Well guess what happened to Altium, a tech business with ARR fee model?

It sold for A$9.1B.

This little aussie microcap will be a unicorn, so hold onto your shares.

10x