DSE - Dropsuite Limited

[System]

Dropsuite Limited (DSE) was formerly known as Excalibur Mining Corporation Limited (EXM).

Dropsuite is a Singapore based company providing online Cloud-based backup software that enables small and medium sized enterprises (SMEs) worldwide to backup, recover and protect their digital assets. It has developed the software using its in-house engineering team. Dropsuite distributes its backup software by integrating them into the platforms of some of the world's largest IT Service Providers, who in turn sell Dropsuite's software to their end users (mostly SMEs).

https://dropsuite.com

 

[greggles]

Dropsuite Limited looks to be making a comeback from lows of 2.7c in May to an intraday high of 5.9c today. The sell down in previous months was on low volume with heavy volume coming in near its lows last month.

At the end of the last quarter the company had $4.35 million in the bank with an operating loss of only $465,000, so they have plenty of time to get cash flow positive before their available cash is depleted.

Today they announced that they have exceeded 300,000 paid users (20% growth for the month) and secured a new partnership with leading Vietnamese hosting provider Mat Bao, furthering their geographic expansion in Asia.

 

[greggles]

I had a feeling this one was going to head higher, and it has. In fact, it's doubled in price in one week. No news since my post above from 14 June, so I wonder if it's retail punters or someone else who's getting on board?

 

[greggles]

Dropsuite's growth in paid users continues unabated.

At 14 May 2018 they had 250,000 paid users, at 14 June 2018 they had 300,000 paid users and at 4 July 2018 they had 400,000 paid users. The company attributes this growth to a recently re-launched email backup product from a partnership secured in April with a large IT Service Provider.

Nice gap up today. It will be interesting to see their next quarterly revenue figures to determine exactly how these paid users are translating into dollars.

 

[barney]

Hard to keep up with you Greg …

I know nothing about the tech space but according to their presentations, the Company generates about $1.24 per month per user at a margin of around 80% ……. If they now have 400,00+ users per month ?? then that would make for some pretty good numbers at face value which may explain the good looking chart

I see that last Quarter they generated $700K of revenue but also had about $700K of staff costs ….. That ratio will need to be improved from a fundamental perspective. Worth watching for sure.

 

[galumay]

the Company generates about $1.24 per month per user at a margin of around 80% …….

but...

I see that last Quarter they generated $700K of revenue but also had about $700K of staff costs …..

..which is a margin of less than 0!

 

[barney]

Yeah when I saw the wages amount it did raise a small red flag which is why I mentioned it …..

I assume these types of businesses are a bit "wage heavy" until they scale their operations up which is obviously their plan ….

They do have $4.3 million in the bank so if they can cover all costs/wages etc with current income that's not a bad platform to start from. The market appears to be rewarding their last 2 announcements which indicate growth.

Tech is not my thing but if you compare it to a Spec mining Stock who are constantly chasing funds from shareholders in the early years, the numbers DSE is throwing up appear to make it worth keeping an eye on IF they continue to grow their User base. There's always a few IF's of course

 

[greggles]

I assume these types of businesses are a bit "wage heavy" until they scale their operations up which is obviously their plan ….

They do have $4.3 million in the bank so if they can cover all costs/wages etc with current income that's not a bad platform to start from. The market appears to be rewarding their last 2 announcements which indicate growth.

With these kind of businesses, the struggle is to get cash flow positive. When they get there, they are generally re-rated as a lot of the risk is taken out of equation.

So the market will be looking carefully for the break even point. The next quarterly should provide a good guide as to how they are going. With $4.3 million in the bank they have a fair bit of time up their sleeve.

I wonder what the churn rate is like? I haven't seen any mention of that but my guess is that it would be fairly minimal as they appear to be targetting the corporate sector.

I'm just sitting on the sidelines and watching due to the price action.

 

[greggles]

Dropsuite continuing to grow paid users and revenue based on their Quarterly Activities Update which was released today.

DSE has experienced 50% growth in paid users in the last month, increasing from 400,000 to ~600,000.

Customer receipts increased 21% quarter-on-quarter to $860,000 (Q1: $707,000). The company said that this quarter's receipts from customers doesn't reflect the recent user growth due to partners' payment terms ranging from 30 to 60 days from date of invoice.

Quarterly cash burn has stabilised at -$318,000 (or -$518,000 normalised) and is an improvement on the first quarter (31 March 2018: -$610,000).

The market seemed to like the quarterly and the DSE share price finally cracked the 14c mark and is currently trading at 15.5c with an intraday high of 16c. Volume today is at all all-time high so there is some real conviction in today's move up.

 

[Ann]

This had a nasty falling knife end of October 2018 after some bad reporting news. Currently pretty much all of the indicators I have looked at are pretty much flat line along with the price. The one indicator which made me look twice and put this stock on watch was the slowly rising weekly Twiggs Money Flow indicator. Is this stock potentially coming back to life ever so slowly?

 

[peter2]

@Ann yes it is.

DSE provides cloud email backup services for businesses. The sharp drop in their share price was due to one of their "partners" deleting 420K low volume email users from their system. DSE has been working to establish additional partners and grow the business. Like Ann, I like the chart and it looks like a BO of the base pattern is imminent. The business is still making a loss as it tries to grow.

 

[peter2]

This is my follow up selection for the May19 monthly comp.
Price spiked at end of March after improving business news so I selected it for April. Since then, price has drifted lower as there's very little bids between 0.035 - 0.040. Further good news in April was a no show. I hoping there's some in May.

 

[peter2]

This is my selection for the June19 monthly comp. Third consecutive month with no success so far.
Price is back near the lows, so I'm thinking the probabilities favour the upside. An acceptable RR if price can get back to 0.045. The volume indicators (OBV, TMF) are dropping significantly which isn't bullish.

 

[Smurf1976]

Since then, price has drifted lower as there's very little bids between 0.035 - 0.040.

Just noticed that someone (not me) has a bid for 1,050,000 shares at 2.8c and there's another one for 510,000 at 2.9c

Perhaps there's some interest emerging?

I've been watching it since your previous posts.

 

[peter2]

The reward:risk ratio still looks good while price is near 0.03 (initial target 0.045). There's another week before the EOM and I should be looking for something with a pulse in the next monthly comp.

 

[peter2]

Did I see this old dog move during the week?
The volume has picked up, OBV and the TMF are also rising.
I might have found my selection for the Aug monthly comp.

 

[peter2]

Since my last post (arrowed) it looks like this old dog moved in it's sleep and a few fleas jumped off (sold). However, while I've been otherwise occupied it looks like there's been a spike in demand (0.03 to 0.04).

 

[debtfree]

Going to try my luck with DSE in the December Comp. It looks like someone knows something here @peter2, price has been strong OCT/NOV. Is it trying to fill in the gap from last year?

Weekly & Daily trend is up, Volume is behaving nicely, both TMF & OBV are rising.

Target .09 (60%) Fill in Gap

 

[aus_trader]

Continuing to grow the business from a slow down that was experienced in June of this year.

Less concentration of revenue coming from the Americas (was 91%), so the business is more diversified and has users pretty much globally now.

Entered for Jan 2019 stock Tipping.

 

[aus_trader]

We have lift off...