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Moving up again after yesterday's 5G contract win.
The last paragraph in today's news is particularly worth noting, with Apple and Samsung launching handsets this year and the 5G rollout having been accelerated so much by COVID-19:
"We believe that we are at the early stage of a global upgrade of cellular network infrastructure to 5G. It is widely expected that companies such as Apple and Samsung will launch handsets in 2020 that will include 5G connectivity, and network operators will respond by rolling out higher bandwidth 5G services to their customers. This presents a major opportunity for MTI's dual band antennas as operators will need to increase the backhaul connectivity between cell towers to deliver these faster services."
Excellent news - hopefully this will flag up MWE's 5G potential to the market in general as this is just the beginning.....
" Contract win
MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce that its antenna division has secured a framework order totaling approximately $0.5m for a 5G dual band backhaul solution . Supply under this order is expected to be completed in the next nine months.
Dov Feiner, General Manager of MTI's antenna division commented: "We see this order as a significant step towards the full deployment of 5G backhaul solutions. So far, we have sold thousands of antennas for 5G backhaul but all in smaller quantities and mainly for field testing and early deployments. Whereas this single larger order to be shipped over a relatively short time period is different and indicative of the market moving forward with the adoption of 5G backhaul solutions.
We believe that we are at the early stage of a global upgrade of cellular network infrastructure to 5G. It is widely expected that companies such as Apple and Samsung will launch handsets in 2020 that will include 5G connectivity, and network operators will respond by rolling out higher bandwidth 5G services to their customers. This presents a major opportunity for MTI's dual band antennas as operators will need to increase the backhaul connectivity between cell towers to deliver these faster services."
Two extracts stand out in particular - first that this is a world first for 5G and is patented:
"MTI Wireless Edge Ltd. (AIM: MWE) is proud to announce the first and only commercially available ETSI Class 3 and FCC Flat E Band 38 dBi Antenna. This patented antenna was developed in cooperation with our customers to provide a small form factor solution for 5G fronthaul, which complies with the international standards."
And second that it's already in big demand and is at "mass market maturity stage":
"In a very short time hundreds of this innovative antenna have been integrated and deployed in new customer installations."
Mr Shani wasn't so keen to keep *any* of his shares....
my tp remains 50p, but reckon a dip to/below 40p pretty likely st
It's worth re-visiting the fundamentals here.
MWE have a $7.6m cash pile which equates to 6.6p per share. And they also have $5.5m of freehold property as further tangible asset security.
MWE are forecast to make 2.97p EPS this year. If you strip out the cash pile, the current year P/E is only 13.4.
For the year starting in only four months' time, based on 3.39p EPS, the ex-cash P/E drops to only 11.7.
Which is a ridiculously low rating for a high-tech company in the first place, never mind one which is set to benefit from globally exploding sectors like 5G and water management solutions.
Great, it will stay on ST's radar now, with periodic updates.
Annoyingly it's in the Alpha Reports, for which you have to pay extra [rip off]. BUT having been introduced only there it's probably his great hot tip - worth paying extra subscriptions for. And it will eventually come down to plebs like me.
Very nice end to the week :)
The ST effect strikes again!
Wow well done all! I was planning on investing here because I could see it eventually reaching 50p, but didn't pull the trigger (mostly cos I thought it would take a while to reach this level) and now I'm kicking myself ofcourse, but I'm happy to see you all do so well so fast : )
Happy to hold all mine. MWE could be a multibagger over the next year or two given the sectors it's participating in - and the still cheap fundamentals. Plus the large cash pile and freehold property asset backing.
sold 7000 @46.xx
Great to see ST picking up on MWE - and highlighting not only the low P/E but also the involvement in both 5G and climate change:
"Simon Thompson's Alpha Reports 38 minutes ago
Tap into 5G and climate change themes
There are not many technology companies that combine forecasts of 25 per cent profit growth this year and a miserly rating of 11 times cash-adjusted prospective earnings. Yet that’s exactly what's on offer with this company, which is a beneficiary of the home broadband explosion and is poised to take advantage of the world's need to manage climate change."
That's quite a find, Rivaldo.
New article covering MWE's Mottech subsidiary and its success in China - worth copying here in full and thinking about the potential for growth in China:
"China and Israel draw a new chapter in smart agriculture
Publication date: Mon 31 Aug 2020
Agriculture is the most sensitive field of ??China’s opening to the outside world. As the only pilot free trade zone with modern agricultural development as its main feature in China, the Yangling district has taken effective measures to continuously accelerate the pace of China’s agricultural opening up.
It is reported that Yangling has set up three investment and trade service centers in Russia, Kazakhstan, and the United States, and has promoted the construction of six overseas cooperation demo parks between China-Kazakhstan and China-U.S. and two science and technology pilot parks of China-U.S. and China-Israel in Yangling, and thus strongly promoted the development of foreign cooperation in the agricultural field.
The China-Israel International Agricultural Science and Technology Demonstration Park was built on the basis of the technology and products of the Israeli Embassy, Israel Mottech Technology Company, Israel Bermad Control Valve Co., Ltd. and Israel Naandanjainn Irrigation Ltd.
The park introduces Israel's advanced water and fertilizer irrigation equipment and irrigation control system, which is one of the highlights of the entire park. The integrated water and fertilizer system is equipped with Internet of Things and domestic supporting equipment and engineering technology, which will greatly reduce water consumption, and realize smart control at different stages in the irrigation of farmland crops, greenhouse vegetables, fruits, seedlings, and other crops.
Yue Guanglin, chairman of Yangling Yulu Water-saving Greening Engineering Co., Ltd., said that compared with traditional irrigation methods, this new irrigation system can save water by more than 50% in sprinkler irrigation, more than 70% in drip irrigation, and 70-80% in fertilizer savings. More than 90% of the labor force used for irrigation can be saved, and the use of pesticides is reduced by more than 50%, which greatly reduces the investment cost and labor intensity of agricultural production, and can increase the production efficiency of agricultural planting by about 30% on average.
"Through demonstration and promotion, Tibet, Gansu, Qinghai, Hainan, and other places have introduced relevant technologies and equipment to improve the utilization of local water resources, and improve the quality and production efficiency of agricultural products", Yue Guanglin said.
"At present, 12,000 m2 of film multi-span greenhouses have been built, using double-layer thermal insulation films, and the internal environment is soilless cultivation and Israeli greenhouse cultivation model.....etc"
If seller finished, maybe now this share will get a more realistic SP. Let's hope so!
Looks like the dam has broken and the seller is finished.
There's lots of upside here imo given the 5G rollout, the success and global potential of the water management division and the long-term and increasing design-in wins of the consultancy division.
And of course the fundamentals remain very cheap given the forecasts noted above.
I note that online is at last looking very encouraging. You can only buy a maximum 25k at the full 38p offer, whilst you can sell 60k at a good premium at 35.8p.
Looks like the 5G news isn't going to be RNS'd. I'd have though this was ideal for an RNSNON, as non-material but significant news. A missed opportunity imo.
I thought there were a couple of interesting snippets from the new Allenby Capital note:
- since its March'20 launch, 200 vineyards (presumably all French) have already become customers of the new Tethys vineyard management system
- the note specifically states "there is scope to ....expand (Tethys) into other wine producing regions", i.e confirmation that this is a global opportunity
- and re 5G, "MTI supplies four of the largest providers in the backhaul market and is unique in offering both Dual Band and Flat Antenna. CV-19 is accelerating bandwidth demandand 5G network roll out represents a considerable medium growth opportunity"
Great news...and MWE have a "patented technology" for this product line too:
"MTI Wireless Edge LTD. Announces Significant Multiband Antenna Deployment
As capacity demand grows with 5G rollouts worldwide, increasing backhaul throughput is required. In order to provide high backhaul bandwidth as well as high availability, 5G networks are increasingly implementing backhaul via the new multiband solution supporting backhaul with microwave and millimeter wave frequencies over one radio and one antenna.
Aug 24, 2020, 08:00 ET
TEL AVIV, Israel, Aug. 24, 2020 /PRNewswire/ -- MTI Wireless Edge Ltd. (AIM: MWE) is proud to collaborate with Aviat Networks, Inc. (NASDAQ: AVNW), providing the first and only single radio, single antenna solution commercially available and deployed in 15/80, 18/80 and 23/80 GHz.
Dov Feiner, MTI's General Manager commented, "We see this as an important milestone in our antenna offerings - we developed a new patented technology for this product line and are happy to collaborate with Aviat on this unique solution."
"Aviat is excited to partner with MTI to deliver this new technology. With the rollouts of 5G networks around the world, we are seeing a surge in demand for multi-band and we believe we have the industry's leading multi-band backhaul offering", said Pete Smith, President and CEO, Aviat Networks.
On 07 June, Aviat announced that Safaricom, the largest telecom company in Kenya, selected Aviat's WTM 4800 multiband radio platform for 5G backhaul. Multiband is uniquely beneficial in countries like Kenya, which have significantly high microwave spectrum costs. Multiband helps to lower spectrum costs by offloading traffic from costly microwave spectrum onto less expensive E-band spectrum, while still maintaining the trusted reliability of microwave."
Allenby have today issued their post-interims research note:
- target price of 46p
- forecast 2.97p EPS this year, rising to 3.39p EPS next year
- forecast year end net cash of $7.7m
- forecast 5.1% dividend yield
Which makes MWE pretty cheap imo on a P/E for the year ending in four months of only 12.3, soon to drop to just 10.8.
If you strip the cash pile out, the P/E drops to single figures (and of course there's $5.5m of freehold property too).
The confidence is summarised by:
"Management’s confidence in the outlook is underpinned by order book strength and MTI is currently on track to meet our FY20 profitability expectations."
Encouraging to see the full 38p offer price being paid by buyers at last.
Nice summary Rivaldo.
Rather muted response to a reasonable set of results - clearly some selling into the news but I still thought it would pick up a bit more.
Small caps share prices really do seem to be struggling to gain traction at the moment - even when, as with mwe, they have shown that they can deliver through the downturn in the first half of the year.
Yestredays's meeting recording is now available and is perfect - congrats to InvestorMeet:
- already confident in meeting full year expectations due to order books and cost savings
- cost savings are sustainable going forward for H2 and next year, i.e heavily reduced sales and marketing, travel and exhibition costs, which normally comprise 13%-15% of revenues
- H2 normally shows higher profitability, and this year that will especially be the case given COVID-19
- MWE have $7.9m net cash plus a $5.5m property (net of mortgage), i.e $13.4m of tangible asset value against the £32m m/cap
- MWE have paid 5.5c of dividends in the last 3 years, i.e $4m of dividends
- 5G is the biggest growth driver in Antennas, accelerated by COVID-19
- next year will see the big jump in 5G growth
- the LTE/TV White Space segment is also seeing faster growth due to COVID-19, with more broadband into homes and offices
- MWE are the "only company" who can provide both dual band and flat antennas
- MWE are engaged with 4 of the top 7 radio manufacturers in the world, with over 30% of market share
- but not with Huawei, so any loss of business by Huawei should benefit MWE
Machine to Machine Water Management
- China growth is coming this year for the water/irrigation division
- since April Chinese growth has recovered
- MWE have signed several new agreements in China in the last 2-3 months, including one for co-operation with a leading Chinese agricultural company, which has already resulted in product shipments
- expanding in Peru and Chile and Sout America in general
Distribution & Consulting
- revenues are now coming through from product wins 2-3 years ago
- Russian contract wins announced earlier this year will benefit next year onwards
MWE are looking for profitable, earnings-enhancing acquisitions in wireless.
They could also expand into wireless electricity management and into lighting in parks etc.
I flirted with the idea of investing here a while back but felt hesitant and now, having seen the HY results, I can see my hesitancy was mistaken because they've outperformed what I had anticipated.
Seeing as H2 seems to always be much better than H1, it looks like there'll be some strong 10-20% growth this year despite all the disruption from covid.
The (forward) PE ratio isn't what I would consider cheap but it's probably low compared to the growth achieved or certainly compared to the growth they would achieve in a 'normal' (non covid-affected year).
The EV/EBIT ratio is lower than the PE ratio, always a good sign of the financial health of the company as well.
I need to do more research to fully understand the business but this has risen well up my list of shares to invest into next.
I know the market reaction has been rather subdued today but it's clear this'll rise above 40p soon.
Best of luck all : )
Paul Scott has reviewed MWE's rsults on Stockopedia today, and, allowing that he knows nothing about the company itself, has concluded very positively:
"My opinion - as usual, this is just a review of the numbers. It’s up to you to form a more detailed understanding of the company, and to predict its future. I can’t possibly do that for the 500+ companies I cover.
Since the company has today confirmed 2020 expectations, then we should be able to rely on the growth amp; value graphics. As you can see below, it’s a sea of pleasingly dark green.
I can see why some readers like this share, it looks good."