M Partners Ron Shuttleworth Raises Target on International Datacasting

The footprint of Thaicom's "Thaicom-2" satellite includes Thailand, Laos, Cambodia, Myanmar, Vietnam, Malaysia, the Philippines, Korea, Japan, and the East Coast of China.

Yesterday, International Datacasting (TSX:IDC) announced it had signed a deal with Thaicom PLC to to operate a cinema distribution system in Southeast Asia.

IDC’s platform will deliver content for satellite distribution to at three-thousand cinemas across Thailand and other parts of the Asia-Pacific region. Thaicom was founded in 1991 delivers broadband services to millions of users across fourteen countries in Asia-Pacific.

M Partners analyst Ron Shuttleworth says the deal will likely use less advanced technology than other International Datacasting work, which will likely mean the cost per unit price will be lower. Nonetheless, he says, the Thaicom deal is a material development, as it more than doubles the number of cinema endpoints IDC has. In a research update to clients today, Shuttleworth maintained his BUY rating on IDC and upped his twelve-month target to $.45 from his previous target of $.35 cents.

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Ottawa’s International Datacasting has a long history with satellites. The company got its start delivering radio programs across huge networks by satellite. IDC was one of the pioneers at delivering Internet Protocol signals, the communications protocol used for relaying packets of information across the network that supports the internet, by satellite. In the time since, International Datacasting has helped upgrade the network of the National Public radio and supported the delivery of Thomson Reuters financial information. Revenue has grown slowly but steadily; from $24.7-million in fiscal 2008 to $34.4-million in 2011.

The past few years have been unfavorable for capital expenditure spending in Europe, says Shuttleworth. This was the reason he moved his fiscal 2013 revenue forecast on IDC down to $34.2-million from $39.7-million. Yesterday’s news, however, means he is raising his 2013 revenue target to $38-million. IDC management, says Shuttleworth, believes the ThaiCom deal is not a “one-off” type of situation and could result in increased business in the Asia-Pacific region.

Shares of International Datacasting closed today up 1.4% to $.35 cents.