Fund Manager Summary
The fund managers believe that the outlook for Quickstep Holdings Ltd presents a noteworthy opportunity, particularly given its recent $1.25m contract with drone manufacturer Carbonix, which is essential for its growth. In their opinion, despite the disappointing performance reflected in the share price of approximately $0.21, the market capitalisation of $20m indicates that even small contracts can significantly impact the company. Additionally, the expansion of domestic MRO services for Jetstar, alongside the establishment of a defence manufacturing facility in Kansas, could represent a significant step-change for Quickstep, potentially supported by existing customers and government funding. This strategic growth could enhance the company's position in the market.
Source: Trading View
Commentary From The Managers
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Cyan Investment Management
31 Dec 2024
$0.56
Summary
- Cyan Investment Management updates its investment thesis on Quickstep Holdings.
- Quickstep Holdings recently saw a significant increase in performance, up 41%.
- The company entered into a Scheme Implementation Deed with ADSAM at a value of $0.575.
- This deal is linked to Quickstep's manufacturing work for Lockheed Martin and the C-130 Hercules program.
- Quickstep's directors have approved the transaction, pending no "Superior Proposal".
- Last month, Cyan Investment Management noted the stock was trading at a similar level, leading to the decision to hold.
- The fund is anticipating the potential for a new bidder to emerge in the mix.
- Continuing positive trading results contribute to the decision to hold shares in Quickstep.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Cyan Investment Management
31 Dec 2024
$0.56
- Cyan Investment Management updates its investment thesis on Quickstep Holdings.
- Quickstep Holdings recently saw a significant increase in performance, up 41%.
- The company entered into a Scheme Implementation Deed with ADSAM at a value of $0.575.
- This deal is linked to Quickstep's manufacturing work for Lockheed Martin and the C-130 Hercules program.
- Quickstep's directors have approved the transaction, pending no "Superior Proposal".
- Last month, Cyan Investment Management noted the stock was trading at a similar level, leading to the decision to hold.
- The fund is anticipating the potential for a new bidder to emerge in the mix.
- Continuing positive trading results contribute to the decision to hold shares in Quickstep.
Summary
Cyan Investment Management
30 Nov 2024
$0.40
- Quickstep Holdings (QHL +84%) received a takeover offer from ASDAM at $0.40, representing a 105% premium to last sale price.
- ASDAM is the holding company for Marand, which Quickstep manufactures products for, including work for Lockheed Martin and the C-130 Hercules program.
- Quickstep has made significant progress in restructuring operations, including closure of unprofitable business lines.
- Expectations for profitability improvement in FY25 are anticipated.
- Despite the bid, Cyan Investment Management continues to hold, expecting either an increased bid or a counteroffer.
- The company is undergoing a business valuation, which is expected to unlock further stock value.
Summary
Cyan Investment Management
31 Oct 2024
$0.22
- Cyan Investment Management notes a significant performance drop for Quickstep (QHL -19%).
- Following a takeover offer in early November, there were no signs of insider trading.
- The initial evaluation of the takeover bid indicates there is substantial underlying value in Quickstep.
- Cyan Investment Management has opted to retain their shares.
- The current stock trading aligns with the existing takeover price.
Summary
Cyan Investment Management
31 Aug 2024
$0.25
- Aerospace business Quickstep (QHL -27%) saw a significant pullback despite a rise of over 120% in July.
- The decision to close down their loss-making Aircraft Maintenance (Aerospace Services) division is seen as materially good news.
- QHL's full-year results indicated revenue of $99m, exceeding previous guidance by $3m.
- Segmented results highlighted achieving underlying profitability and positive cash-flow from continuing operations.
- With a current market capitalization of ~$20m, QHL is viewed as absurdly cheap compared to similar ASX listed companies.
- While month-to-month volatility may persist, improving underlying company performance suggests a continued upward trend in share price.
Summary
Cyan Investment Management
31 July 2024
$0.38
- Cyan Investment Management has been invested in Quickstep Holdings for some time.
- Quickstep's strong points include its carbon fibre manufacturing technology and established clients like Lockheed Martin and Northrup Grumman.
- The company boasts almost $100m in revenue with a modest market capitalization of $30m.
- Recent share price movements indicate broader market appreciation for Quickstep's value proposition.
- A recent ‘Business Update’ highlighted revenue exceeding forecasts, cost savings initiatives, and record revenues from their drone production division.
- Cyan noted Quickstep's attractive relative valuation compared to other companies such as Titomic and DroneShield.
- In a LinkedIn post, Cyan highlighted Titomic's $8m revenue vs $187m market cap, and DroneShield's $70m revenue vs $1,200m market cap.
Summary
Cyan Investment Management
31 Mar 2024
$0.21
- Cyan Investment Management remains focused on the potential of Quickstep Holdings Ltd (QHL), despite recent performance concerns.
- The recent announcement of a $1.25m contract with Carbonix reflects significant growth potential for QHL given its market capitalisation of just $20m.
- This contract is expected to be fulfilled within the next three months, highlighting Quickstep's role in specialized manufacturing.
- Expansion of domestic MRO services with Jetstar is a positive indicator for operational capabilities.
- QHL is also making strides into the US market by establishing a defence manufacturing facility in Kansas, which mirrors its Australian operations.
- This US expansion could be supported by existing defence contract customers and potential funding from US state or federal government entities.
- Cyan Investment Management views this as a significant step-change that could enhance Quickstep's market position.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With a mere $20 million market cap, Quickstep's recent $1.25 million contract seems pivotal, yet the stock's tepid response raises questions. As they venture into U.S. defense manufacturing, the stakes are high—this could either be a game-changer or a gamble."
Last Updated: 31 Dec 2024
Query The Data
Frequently Asked Questions
Who is investing in Quickstep Holdings Ltd (ASX:QHL)?
Fund managers including Cyan Investment Management have invested in Quickstep Holdings Ltd (ASX:QHL).
Why do fund managers invest in Quickstep Holdings Ltd?
Fund managers are investing in Quickstep Holdings Ltd due to its strategic contracts and expansion plans. A recent $1.25 million contract with Carbonix highlights its potential for growth, particularly given its small market capitalization of $20 million. Additionally, Quickstep's establishment of a defense manufacturing facility in Kansas, supported by existing contracts and potential government funding, positions the company for significant future development in both domestic and international markets.
What happened to Quickstep Holdings Ltd (ASX:QHL)?
There have been no recent updates from fund managers regarding Quickstep Holdings Ltd although fund managers including Cyan Investment Management have previously commented.