Stratech

Stratech: PhillipCapital highlights recent developments:
Feb '15: Announced contract to install iFerret at Hong Kong International Airport (HKIA).
Apr '15: Restructured from Stratech Systems Ltd to The Stratech Group
Apr '15: Announced contract to upgrade the iFerret at Changi Airport which is estimated to contribute $1.7m revenue.

Investment Thesis:
1) Aviation safety coming under greater scrutiny. Global air traffic forecasted to grow 4.5% CAGR until 2030 (Source: ICAO). Recent aviation tragedies will likely place pressure on Aviation Authorities to tighten up on safety.

2) Adoption is inevitable, just a matter of time. The most high-profile FOD-related accident involved an Air France Concorde taking off from Paris in Jul 2000. FOD damage is estimated to cost US$4b annually from aircraft repairs & maintenance, and up to US$13b annually.

3) Key product of the iFerret appears to be gaining traction. Stratech recently announced two contracts. One for the installation of the iFerret at HKIA, and the upgrade of the iFerret at Changi Airport. The iFerret had also displaced the incumbent system at the Dubai International Airport last year.

Contingent on the successful adoption of the iFerret globally, Stratech's stock value could range from $0.04 (steady state) to $0.069 (high-growth stage) based on P/B valuation methodology.