Echelon Wealth Partners analyst Rob Goff says recent deals in China highlight the upside in D-Box Technologies (D-Box Technologies Stock Quote, Chart, News: TSX:DBO).
This morning, D-Box announced it had signed an agreement with Bejing’s Link Digital Cinema China Technology to to distribute D-Box technology throughout China. The news follows on two other recent deals the Quebec-based company has made in China.
“As a company, we are always looking for innovative products and leading-edge technology that will engage audiences and give them compelling reasons to go to the movie theatres,” adds Qing Jingchuan, general manager from Link DC. “We also want to bring lasting value to our clients and create more business for them. This agreement with D-Box gives us all that and more.”
Goff says D-Box Chinese deals could be the start of something big.
“We see three potentially redefining catalysts, about which further evidence should emerge over the next 12-18 months,” says the analyst. “Firstly, we see D-BOX taking very disciplined and strategic moves to secure financing partners, industry sponsorship, and the necessary government support to penetrate the Chinese market. We also believe that initial trials, partnerships and now sales are positioning D-BOX for home theatre and commercial simulation opportunities driven by VR. We further see D-BOX building its library and consumer product to position itself for home theatre applications over the next 18-24 months.”
In a research update to clients today, Goff maintained his “Speculative Buy” rating and one-year price target of $0.95 on D-Box Technologies, implying a return of 43.9 per cent at the time of publication.
Goff thinks D-Box will generate Adjusted EBITDA of $1.5-million on revenue of $33.8-million in fiscal 2017, numbers he thinks will climb to EBITDA of $5.6-million on a topline of $37.4-million the following year.