iOThree Limited is a Singapore-based provider of maritime digital technologies, including satellite connectivity and digitalization solutions, aimed at facilitating the maritime industry’s digital transformation.

Singapore

iOThree Limited Ordinary Shares

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

Over the past six months, the stock has consistently fallen, resulting in a 0% total decrease. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 1ppts. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 5.6 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

IOTR has very poor trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity may be unstable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to bleak profitability, negligible return on capital, and poor working capital management.

In highly turbulent market conditions, IOTR is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, IOTR is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is overvalued relative to its peers. Specifically, the stock is overvalued on EV/EBITDA, underpriced on P/FC. 

iOThree Limited Ordinary Shares

$ 0.41

2

iOThree Limited Ordinary Shares

$ 0.41

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.41

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