Nanotech Security Corp V.NTS

Q3: Doubling of Revenue Reaffirmed while Asian Deal Progress

[93Darkhorse93]

Looks like everything is progressing well just with the Asian banknote delay by a couple months as it awaits to go ahead to ramp production.  They key thing the management reaffirmed that revenue will be doubling may just be pushed back a quarter. 

 

The gross margin contraction isn’t a problem as it was simply a revenue mix between its two division which should be real temporary as the banknote deal fires up.

 

I would just point out the success it seems they have been having with their optical device development contract. As it comes to completion Nanotech continues to work with this customer right as they are ready to make a decision on a major banknote.  If they get onto a second banknote all of a sudden revenue would double again. I especially like their chances as the major nation can look at the success that Nanotech has had with the Asian banknote. I think the stock would go north of 2 SP in a hurry if they were able to secure another banknote deal and have revenue quadruple.

 

I would argue that the stock has been consolidating in this 1.00 -1.40 range as it waits for the production and resulting revenue to begin to ramp, this looks like it will be the last quarter we will have to wait.  Buying it at the bottom of the range right here looks good to me especially as they have raised all the money needed for the foreseeable future with the big upside optionality of a second banknote deal.