Director, RaaS Advisory, Research as a Service (RaaS)

Research as a Service (RaaS)

Director, RaaS Advisory

Insightful Financial Models and Research Analysis

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Equity Bottom-Up

Harvest Technology Group Ltd / Equity Bottom-Up

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<h2>Harvest Technology Group Ltd</h2>
<h3>Strong growth in cash receipts, new target for Sept MRR</h3>
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<p>Harvest Technology Group Limited (ASX:HTG) licenses its proprietary video compression and encryption technology for low-bandwidth, high-latency applications needing secure real-time streaming video and audio communication. The company delivers products and solutions for video, audio and data transfer from anywhere, via satellite or terrestrial networks regardless of congestion or quality. HTG’s products and solutions enables real-time monitoring of remote locations, real-time feedback for field technicians, and secure video and audio conferencing. HTG reported quarterly cash receipts of $1.001m, up 32% on the previous corresponding quarter (pcp) and 55% ahead of Q3 FY22. Q4 is seasonally a weaker quarter than the first two quarters of the year. Monthly recurring revenues (MRR) exceeded $0.257m in the June quarter, up from $0.212m in the March quarter and the company has forecast MRR of $0.34-0.38m in the September quarter. Annual recurring revenues at June were in excess of $3.0m. HTG forecasted its total monthly gross operating overheads would be $0.825m in FY23. By our estimates, this puts the company on a path to be operating cashflow breakeven in FY23 and into operating profitability by early FY24. Our forecasts remain unchanged following the release of the Q4 result and our base case valuation remains steady at $0.28/share.</p>
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<h3>Business model</h3>
<p>HTG offers products and solutions which enable real-time monitoring of remote locations, real-time feedback for field technicians, and secure video conferencing. HTG has two product platforms, Infinity NodestreamTM and Remote Inspection System (RiSTM). The company is on the verge of large-scale roll-out of the Infinity NodestreamTM secure video transmission product suite through reseller agreements with the major maritime satellite communications operators. It has also launched its own Remote Inspection System (RiSTM) and a US business focused on enabling remote field technician support via real-time video over low-bandwidth networks and satellite. HTG licenses its hardware and software solutions to customers. The company has a Perth headquarters and has expanded over the past 12 months, establishing sales offices in the US and UK/EMEA regions. HTG is currently focused on converting reseller agreements with Speedcast and Marlink and partner leads with Inmarsat, the world’s largest maritime satellite service providers, into actual licensed customers with a target of 1,000 licences by end-CY22.</p>
<h3>Q4 shows continued growth in MRR over Q3</h3>
<p>HTG reported continued growth (+16%) in software and hardware recurring revenues and an +83% increase in booked revenues quarter-on-quarter (qoq). Q4 R&amp;D expense rose slightly, however, other costs were lower with increased attention to cost discipline noted by management. Net operating cash outflow was reduced from $3.65m in Q3 to $2.19m with $4.5m cash at bank and $1m in committed placement proceeds. Management forecasts 32% growth in Monthly Recurring Revenues (MRR) in FY23 Q1 with continued control of costs. The company is targeting 1,000 Nodestream licences by end December 2022 from less than 100 at the end of March.</p>
<h3>Valuation base case at $167m or $0.28/share</h3>
<p>Our valuation is based on a DCF using a Beta of 1.47 and risk-free rate of 3.5%. We have modelled three cases differentiated by customer conversion rates, cost of hardware manufacture and licence fees received. Our downside case values HTG at $123m, while we can estimate upside to $347m. The crucial period to achieve sufficient momentum in sales to justify these valuations is in CY22 with results from Q3, Q4 and outlook supportive.</p>
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Harvest Technology Group Ltd
Strong growth in cash receipts, new target for Sept MRR




Harvest Technology Group Limited (ASX:HTG) licenses its proprietary video compression and encryption technology for low-bandwidth, high-latency applications needing secure real-time streaming video and audio communication. The company delivers products and solutions for video, audio and data transfer from anywhere, via satellite or terrestrial networks regardless of congestion or quality. HTG’s products and solutions enables real-time monitoring of remote locations, real-time feedback for field technicians, and secure video and audio conferencing. HTG reported quarterly cash receipts of $1.001m, up 32% on the previous corresponding quarter (pcp) and 55% ahead of Q3 FY22. Q4 is seasonally a weaker quarter than the first two quarters of the year. Monthly recurring revenues (MRR) exceeded $0.257m in the June quarter, up from $0.212m in the March quarter and the company has forecast MRR of $0.34-0.38m in the September quarter. Annual recurring revenues at June were in excess of $3.0m. HTG forecasted its total monthly gross operating overheads would be $0.825m in FY23. By our estimates, this puts the company on a path to be operating cashflow breakeven in FY23 and into operating profitability by early FY24. Our forecasts remain unchanged following the release of the Q4 result and our base case valuation remains steady at $0.28/share.




Business model
HTG offers products and solutions which enable real-time monitoring of remote locations, real-time feedback for field technicians, and secure video conferencing. HTG has two product platforms, Infinity NodestreamTM and Remote Inspection System (RiSTM). The company is on the verge of large-scale roll-out of the Infinity NodestreamTM secure video transmission product suite through reseller agreements with the major maritime satellite communications operators. It has also launched its own Remote Inspection System (RiSTM) and a US business focused on enabling remote field technician support via real-time video over low-bandwidth networks and satellite. HTG licenses its hardware and software solutions to customers. The company has a Perth headquarters and has expanded over the past 12 months, establishing sales offices in the US and UK/EMEA regions. HTG is currently focused on converting reseller agreements with Speedcast and Marlink and partner leads with Inmarsat, the world’s largest maritime satellite service providers, into actual licensed customers with a target of 1,000 licences by end-CY22.
Q4 shows continued growth in MRR over Q3
HTG reported continued growth (+16%) in software and hardware recurring revenues and an +83% increase in booked revenues quarter-on-quarter (qoq). Q4 R&amp;D expense rose slightly, however, other costs were lower with increased attention to cost discipline noted by management. Net operating cash outflow was reduced from $3.65m in Q3 to $2.19m with $4.5m cash at bank and $1m in committed placement proceeds. Management forecasts 32% growth in Monthly Recurring Revenues (MRR) in FY23 Q1 with continued control of costs. The company is targeting 1,000 Nodestream licences by end December 2022 from less than 100 at the end of March.
Valuation base case at $167m or $0.28/share
Our valuation is based on a DCF using a Beta of 1.47 and risk-free rate of 3.5%. We have modelled three cases differentiated by customer conversion rates, cost of hardware manufacture and licence fees received. Our downside case values HTG at $123m, while we can estimate upside to $347m. The crucial period to achieve sufficient momentum in sales to justify these valuations is in CY22 with results from Q3, Q4 and outlook supportive.













Harvest Technology Group Ltd - Strong Growth in Cash Receipts, New Target for Sept MRR

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<div>
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<h2>Harvest Technology Group Limited</h2>
<h3>Launching real-time video everywhere</h3>
<div>
<div>
<div>
<div>
<p>Harvest Technology Group Limited (ASX:HTG) licenses its proprietary video compression and encryption technology for low-bandwidth, high-latency applications needing secure real-time streaming video communication. The company delivers solutions for data transfer from anywhere via satellite or congested networks. Harvest offers a solution which enables real-time monitoring of remote locations, real-time feedback for field technicians, and secure video conferencing. In 2022 Harvest has launched two new product platforms with further product developments expected. The company raised $6.78m in March via a private placement in preparation for an increase in sales tempo and customer numbers. Harvest is on the verge of large-scale roll-out of the Infinity Nodestream secure video transmission product suite through reseller agreements with the major maritime satellite communications operators. The company has launched its own Remote Inspection Service (RiS) and a US business focused on enabling remote field technician support via real-time video over low-bandwidth networks and satellite. Finally, Harvest has successfully trialled Nodestream with Cisco’s Webex video conferencing product. The company has a successful product and is now focused on converting these opportunities to revenues.</p>
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<div>
<h3>Business model</h3>
<p>Harvest licenses its hardware and software solutions to customers. The company has a Perth Headquarters and has expanded over the past twelve months, establishing sales offices in the US and UK/EMEA. HTG is currently focused on converting reseller agreements with Inmarsat, Speedcast and Marlink maritime satellite service providers into actual licensed customers with the target of more than 1,000 licences by end CY22.</p>
<h3>Q3 focused on positioning and gathering momentum</h3>
<p>Vessel operations ceased in Q2 hence revenues were down in Q3 ending in a quarterly operating cashflow of -$3.65m. HTG retains $6.96m cash and reports a strong increase in monthly recurring revenue (MRR) for its core Infinity Nodestream product. This fiscal year Harvest has raised capital, launched a US SaaS business (Opsivity), launched the Remote Inspection Service (RiS) using Infinity Nodestream to domestic customers, provided a proof of concept for integration with Cisco Webex, signed three maritime satellite reseller deals, and successfully demonstrated capacity to the Australian Defence Force and Federal Government. Events are moving quickly, and we expect to see these opportunities convert to sales over the course of CY22 and CY23. The company is targeting 1,000 Nodestream licences by December 2022 from less than 100 at the end of March.</p>
<h3>Valuation base case at $167m ($0.29/share)</h3>
<p>Our valuation is based on a DCF using a Beta of 1.47x and risk-free rate of 3.5%. We have modelled three cases differentiated by customer conversion rate, cost of hardware manufacture and licence fee received. Our downside case values HTG at $123m, while we can estimate upside to $347m. The crucial period to achieve sufficient momentum in sales to justify these valuations is in CY22.</p>
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Harvest Technology Group Limited
Launching real-time video everywhere




Harvest Technology Group Limited (ASX:HTG) licenses its proprietary video compression and encryption technology for low-bandwidth, high-latency applications needing secure real-time streaming video communication. The company delivers solutions for data transfer from anywhere via satellite or congested networks. Harvest offers a solution which enables real-time monitoring of remote locations, real-time feedback for field technicians, and secure video conferencing. In 2022 Harvest has launched two new product platforms with further product developments expected. The company raised $6.78m in March via a private placement in preparation for an increase in sales tempo and customer numbers. Harvest is on the verge of large-scale roll-out of the Infinity Nodestream secure video transmission product suite through reseller agreements with the major maritime satellite communications operators. The company has launched its own Remote Inspection Service (RiS) and a US business focused on enabling remote field technician support via real-time video over low-bandwidth networks and satellite. Finally, Harvest has successfully trialled Nodestream with Cisco’s Webex video conferencing product. The company has a successful product and is now focused on converting these opportunities to revenues.




Business model
Harvest licenses its hardware and software solutions to customers. The company has a Perth Headquarters and has expanded over the past twelve months, establishing sales offices in the US and UK/EMEA. HTG is currently focused on converting reseller agreements with Inmarsat, Speedcast and Marlink maritime satellite service providers into actual licensed customers with the target of more than 1,000 licences by end CY22.
Q3 focused on positioning and gathering momentum
Vessel operations ceased in Q2 hence revenues were down in Q3 ending in a quarterly operating cashflow of -$3.65m. HTG retains $6.96m cash and reports a strong increase in monthly recurring revenue (MRR) for its core Infinity Nodestream product. This fiscal year Harvest has raised capital, launched a US SaaS business (Opsivity), launched the Remote Inspection Service (RiS) using Infinity Nodestream to domestic customers, provided a proof of concept for integration with Cisco Webex, signed three maritime satellite reseller deals, and successfully demonstrated capacity to the Australian Defence Force and Federal Government. Events are moving quickly, and we expect to see these opportunities convert to sales over the course of CY22 and CY23. The company is targeting 1,000 Nodestream licences by December 2022 from less than 100 at the end of March.
Valuation base case at $167m ($0.29/share)
Our valuation is based on a DCF using a Beta of 1.47x and risk-free rate of 3.5%. We have modelled three cases differentiated by customer conversion rate, cost of hardware manufacture and licence fee received. Our downside case values HTG at $123m, while we can estimate upside to $347m. The crucial period to achieve sufficient momentum in sales to justify these valuations is in CY22.













Harvest Technology Group Limited - Launching Real-Time Video Everywhere

Australia

Harvest Technology Group Ltd provides metal work machinery. The Company offers cutting edge technology for offshore energy sector. Harvest Technology Group serves customers in Australia.

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Harvest Technology Group Ltd (HTG AU)

Harvest Technology Group Ltd - Strong Growth in Cash Receipts, New Target for Sept MRR

Harvest Technology Group Ltd Strong growth in cash receipts, new target for Sept MRR Harvest Technology Group Limited (ASX:HTG) licenses...

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Harvest Technology Group Limited - Launching Real-Time Video Everywhere

Harvest Technology Group Limited Launching real-time video everywhere Harvest Technology Group Limited (ASX:HTG) licenses its proprietary...

Research as a Service (RaaS)

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