Korean site visit gives Haywood confidence in Apivio Systems

A visit to Apivio Systems (TSXV:APV) offices in South Korea have given Haywood analyst Pardeep Sangha a shot of confidence that his bullish call on the stock is the correct one.
In a research update to clients today, Sangha reiterated his “Buy” rating and one-year price target of $1.00 on Apivio, implying a return of 181.7 per cent at the time of publication.
At Apivio’s office in South Korea, which operates under the entity Moimstone Co. Ltd, Sangha says his understanding of the importance of the operation and how it fits into the company’s future was heightened. Apivio was founded as Moimstone in South Korea in 2003.
“We are maintaining our $1.00 target price, but now have a greater appreciation and confidence in the Korean operations,” says Sangha. The Korean office is of great importance because currently most of Apivio’s revenue is generated in South Korea, the R&D team and manufacturing for all of Apivio’s products is carried out in South Korea, and the positive cash flows from Korean operations have been used to fund new product development of the Android based smart desktop phone and WiFi phone.”
Sangha notes that Moimstone is already the “dominant player” in the South Korean VoIP market for Centrex services, with over five-million handsets sold there. The analyst says he believes that the UT800 desktop phone could be going global with NEC, as the product has caught the attention of the NEC headquarters in Japan.
Sangha is forecasting that Apivio will grow its topline by 21 per cent in fiscal 2015 to $56.4-million, another 13 per cent the following year to $63.8-million, and then another 17 per cent in fiscal 2017 to $74.8-million.
Disclosure: Apivio is an annual sponsor of Cantech Letter.