Stockchase Opinions

Robert McWhirter Zecotek Photonics ZMS-X WATCH Oct 11, 2018

He believes they are up to some interesting things. They make hard to make crystals for core scanners. There is a backlog of demand from clients. He thinks there is a good opportunity but the company does not disclose their backlog.

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WAIT

(Market Call Minute) Waiting for the December 1st press release to come true. Significant potential.

COMMENT

(His largest holding at about 11%.) They basically make crystals. Their near term potential customer is a large Hadron Collider in Switzerland, which has been restarted and is attempting to more than double the power. Hopefully, between now and the end of June, there will be some orders. Also, have a 3-D printing application, working on metal and ceramic printing, and expects to have that prototype done by the 4th quarter of this year. He is still quite positive on the company.

COMMENT

His largest holding. The key in the near term is the Large Hadron Collider in Switzerland which scoured the earth about 2 years ago looking for the best possible crystals to be able to keep track of the photons. This company’s crystals have been described as the only ones that will work. The company is also working on the combination of the crystal as well as the detector as the industry moves towards more of an electronic basis, which will allow them to double the size. He is hoping that before the end of the year crystals will be purchased. Separate to that, there is good opportunity for them in other areas including 3-D screen. Also, working on a 3-D printer for industrial applications using ceramics and extremely high temperatures.

COMMENT

Makes crystals that are used to find little particles. The main application that people are excited about is for the CERN in Switzerland. CERN also has a PET medical scanner division doing research, because the physics that are similar in a PET medical scanner are very similar to what is going on in the CERN doughnut. This company is now making a new and improved detector, so that instead of getting $1 worth of sales for the crystals, you get an extra dollars worth of sales from the detectors.

COMMENT

This has a patented process and methodology of creating extremely precise crystals for measuring stuff that happens within PTE medical scanners as well as in the Hadron Collider. They’ve talked about sales into a OEM in China, and are now working on the 3rd device. This could lead to 200 sales over a five-year period. People are still waiting for news on a potential contract with Philips. Sales have increased on the underlying business. Very speculative.

COMMENT

Manufactures crystals that are used in medical imaging devices, as well as for the large hadron collider in Switzerland. Currently selling their product to a Chinese medical manufacturer. They are also working on 3-D displays with some European automakers. They have a great product and the industry is moving towards their solutions. Currently, they don’t have a significant visible backlog beyond the Chinese opportunity.

COMMENT

This makes very interesting crystals that are used for PTE medical scanners. The real opportunity near term, is that they have signed an exclusive deal with a Chinese PTE manufacturer. It is a huge business growth opportunity in China. There has been some significant improvement in the last month or so, because they are not only using these for medical scanners, but they now have industrial applications. Working with a German automaker on a 3-D heads-up display. Also, there is the potential that Phillips may come back to the PTE medical scanner market. The terms of the dropped lawsuit was that Phillips would be required to buy this company’s crystals.

DON'T BUY
The CFO has recently moved on and there is no reason for his departure. The technology is good and they have built a new facility in China. Recent financing has been very attractive. He expects their crystals to be purchased for medical scanners in China and expects good things going forward. There has been no insider buying -- a red flag to him.
WAIT
A new CFO about six months ago is resulting in a change in their business operations. He thinks this is a lottery ticket if you already own it. He would wait until year end -- if it does not do well, take the tax loss then. Right now the company is running radio silent.