"We expect to see a rapid growth phase in the next few years following an inflection point in FY2025. We believe Addvalue is one of the rare Asian space/drone plays in rapid growth mode," he adds. Just recently, the company announced it is working to unlock the market value of its Inter-Satellite Data Relay System (IDRS) business in the US.
"We think a potential spinoff listing in the US market is highly possible, given the much richer valuations of its US peers, coupled with a potential listing of Space X and the high level of interest in the space sector," says Seet.
He estimates that the IDRS business may generate between US$15 million and US$20 million in FY2027 revenue and to grow further to between US$25 million and US$30 million the following year.
Addvalue's production capacity is being expanded from 100 to 200 units per year by the end of 3QFY2026.
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Seet observes that Addvalue's US peers are trading at valuations in a range of 70-200x price to sales, the company has a potential market cap in the US$200 to US$300 million range.
"This allows Addvalue to raise capital at a much higher valuation and could also potentially sell a portion of the business and return cash to shareholders," says Seet.
Meanwhile, the company has maintained a steady new order momentum. Most recently, on March 9, it won new IDRS orders worth US$3.7 million, bringing its total order book to a record of US$26.4 million. "We expect a higher frequency and value of orders ahead," says Seet, whose target price of 12 cents is based on 35x blended FY27/28E valuation.
Addvalue Technologies shares, as at 9.29 am, gained 2.35% to change hands at 8.7 cents, giving it a market value of around $324 million.
