Elektromotive Group Ltd

Are you ready for the future

LEX SP

NOT RATED

Price @7/2/12: S$0.006

52-week range (SGD): 0.004-0.025

Market cap: S$15.0m

Key Takeaways

•

Food & Beverage (F& B) and media services kicked off our Corporate

Focus Series lunch talk yesterday. The Company is in the midst of phasing

out the (F& B) division, with one lease left before complete termination of

F& B. There will be minimal losses involved in 2HFY12 as Elektromotive

managed to terminate the leases early. Publishing division remains for

media purposes such as media coverage. 2H12 results are unlikely to

excite as the company transitions to focus on its electric vehicles (EV)-

related business.Elektromotive, a Company providing electric vehicle charging stations,

•

charging business. Four key catalysts that ignite interest in this stock are:

1) any announcement of a tie-up with automotive makers, 2)

announcement with back-end players in the EV charging business 3)

announcement with power supply companies that provide the electricity

necessary for charging such vehicles, and 4) successful IPO exercise by

its competitor, ChargeMaster, in London.Look forward to FY13 results which will show the potential of its EV

•

in significantly more than the current S$0.7m reported in 1H12. Given the

low base, multiples of this number should not surprise.Revenue growth from the EV-related business in March 2013 could come

•

stake in Elektromotive. The Company could raise its stake in Elektromotive

eventually.Placing full focus on Elektromotive. Currently, the Company owns a 51%

•

the early stage of growth. In the UK, ChargeMaster (established since

2008) is often quoted as a competitor. All eyes are on ChargeMaster now

as the company is aiming for an IPO this year with valuations touted at

market cap of between 75m to 100m British pounds. Although privately

held, industry sources are telling us that the company is still loss making.Small competitors are aplenty as the industry is still fragmented and in

•

In distinguishing itself from competitors in the UK, Elektromotive leverages

on its patent on software and locking mechanism. In addition, an accident

free charging track record stands in the Company’s favour as safety is

paramount when governments deliberate on which partner to work with.Market Leader in the European market and enjoys first mover advantage.

•

electric vehicle as major car makers start to rollout new and more

importantly aesthetically appealing electric vehicle models. One of the

impediments in purchasing an electric vehicle was that the current models

were in a word, ugly.2012 – Year of the electric vehicle. 2012 could well be the year of the

What the company does?

•

company specialises in the manufacture and installation of charging

infrastructure for electric cars and other electric vehicles.Based on the South Coast of the UK, in the City of Brighton and Hove, the

•

Charger and EBConnect network application to manage infrastructure and

user schemes.The company's primary product is the Eleltrobay Charging Point, Home

•

Elektronet.The company has three distinct business units—OEM, Infrastructure and

•

Benz to supply charging posts and data services.Partnerships with major corporations including EDF Energy and Mercedes

•

preparing for the widespread uptake of EVs in the UK by beginning the

installation of recharging points across their dealer networks.Partnerships with Mercedes-Benz and Smart, where both firms have been

•

charge points across the UK and has exported to more than 20 countries

worldwide.Currently, the company has over 1,000 fully installed electric vehicle

Q& A

Q:

taken up by many other companies. What differentiates you from the

other companies?Venturing into this area (technology-wise) is not new and has been

A: We have access to the government with the connections of Prince

Hakeem, which is essential as we need the corporation and support of the

government in order to kick start any projects. Additionally, we connections

with automotive companies and are also the first mover advantage and a

market leader involving in setting the standards for electric vehicle charging.

Q: What differentiates you from ChargeMaster?

A. What distinguishes us would be that firstly, we have a patent on the locking

mechanism and secondly, our software. For the locking mechanism, it is

actually a ledge with RFID technology which provides extra safety.

Additionally, no electric current can go through unless the cord is properly

plugged in (such a safety feature is essential to eliminate the risk of accidental

electrocution). Moreover, we are definitely price competitive.

About Us

•

Park Square, Falmer, Brighton, East Sussex, BN1 9SB, UKLocated in: Elektromotive Ltd The Sussex Innovation Centre, Science

• Surf: info@elektromotive.com

Contact:

Fax: + 44 (0)1273 704499Tel: + 44 (0)1273 704775

Source: Company

Financial analysis

FYE Mar 2008 2009 2010 2011

Revenue (SGD m) 5.5 5.5 5.3 5.5

EBITDA (SGD m) (5.0) 1.7 (0.4) (2.1)

EBITDA margins (%) -91.2% 29.8% -8.3% -37.4%

Pretax profit (SGD m) (54.3) (3.4) 5.6 (5.4)

Net profit (SGD m) (42.7) (3.1) 5.6 (5.4)

EPS (SGD cents) (5.1) (0.4) 0.6 (0.5)

EPS growth (%) n.m. n.m. n.m. n.m.

P/E (x) n.m n.m 1.0 n.m

FD EPS (SGD cents)

(5.1)

(0.4) 0.6 (0.5)

FD P/E (x) n.m n.m 1.0 n.m

Gross DPS (SGD cents)

-

- - -

Dividend yield (%) n.m n.m n.m n.m

PBV (x)

1.5

33.1 2.1 6.1

ROE (%)

-

306.0% -210.0% 393.6% -274.2%

Net gearing (%) 106.0% 87.2% - -