The Making of the Next ULTRA HIGH ROI Technology Company – Part 2
The Making of the Next ULTRA HIGH ROI Technology Company – Part 2
As the market is being massacred by fear of war, inflation, and unscheduled interest rate hike, this had taken a toll on investor’s portfolio performance.
By comparison, our top pick – G3 GLOBAL BERHAD had a relatively stable performance, despite the liquidity crisis in the technology sector.
In our last article (You may read it here https://klse.i3investor.com/web/blog/detail/vcb22/2022-03-02-story-h1599380608-The_Making_of_the_Next_Ultra_High_ROI_Technology_Company_Part_1), we mentioned how the departure of CC Puan and GREEN PACKET BERHAD would change how investors view the company.
And judging by the share price performance when compared to the broad technology sector, it is clear that investors had stopped their selling on G3.
We had also mentioned some of the services that BESTINET SDN BHD provide, which includes FWCMS, bio-medical system, MIGRAMS, BESTID, TAHSS and more. Based on the latest announcement by the company, it would seem that the company will be focusing on the medical related technology application and solutions, instead of the IoT space.
Based on Fortune Business Estimate, the medical devices market alone, which is only one of the applications of medical technology, is expected to register 5.4% growth between 2021 to 2028. Some of the application and solutions include healthcare diagnosis, homecare, wearable devices to track health status, as well as various firmware and software integration to be introduced to the market.
In layman terms, the newly emerge shareholder as well as support from BESTINET HEALTHCARE will provide a good avenue of growth to G3 via potential injection of assets, or projects. And for investors, this mean that G3 will soon return to black.
Take for example, the bio-medical system under BESTINET is a custom-made online system with real-time status updates designed to monitor and manage health issues effectively, and collect medical data required for the recruitment process. This may sound technical, but BESTINET HEALTHCARE has the capability to provide real-time status updates, teleradiology, or in other words x-ray, as well as collaboration with accredited medical centres.
Another good example would be TAHSS, a platform that provide support to comprehensive tourism rehabilitation planning. This leads me to another example:
I would like to remind investors where upon a more relaxed tourism guideline by the government, we are seeing uptick in share price in both the aviation operator AIRASIA as well as solution provider MYEG. G3, who may be providing TAHSS services should be in favour, but sadly, only a few investors unveiled the true value of G3.
I quote my analysis in my first write up on the potential earnings:
Assuming if, BESTINET were to inject 20% of the revenue and profit into G3, which by accounting standard only profit will be recognized, the PAT of G3 shall be circa. RM11.64 million based on latest available revenue data, and excluding any potential growth and following the 60% PAT margin back in 2017.
This is excluding any potential new entity emerged from the strategic investment by BESTINET. Remember, any RM1 million revenue is equivalent to RM0.6 million in PAT due to the exceptionally high margins by BESTINET.
So, my humble-pie expectation for the full year’s earnings for G3 in the next financial year should be approximately RM11.64 million added with RM3 million PAT from its new healthcare related ventures. This is equivalent to an EPS of 0.6765, and the loss-to-profit premium valuation on companies is usually 20%.
At a 20 times PER, this should result in the 16.5 cents in share price for G3, and the current traded level represents a 54.5% margin of safety for investors.
And the largest problem for G3?
Well, it seems like the shareholdings by CC Puan and GREEN PACKET are fully absorbed by the new major shareholder. Hence, the focus now is more towards the potential earnings of G3.
As to when will the profit kick in?
The company had completed most, if not all kitchen sinking exercises. So as soon as the company completes its EGM, which I strongly encourage investors to vote in favour with, we should see some interesting traction in G3.
Stay tuned for our updates on G3!
https://klse.i3investor.com/web/blog/detail/vcb22/2022-03-08-story-h1600126246-The_Making_of_the_Next_ULTRA_HIGH_ROI_Technology_Company_Part_2
