AVTECH: Organisational Drama

Research Update

2015-10-27

11:16

AVTECH reported a quarter with somewhat lower comparable revenues than expected at SEK 3.0 (Estimated SEK 4.1) million. However, Descent revenues was the primary contributor to the reported revenues of likely SEK 1.5-1.9 million which was close to our estimate of SEK 2.2 million. Christer Staaf has decided to take a time-out from his position as CEO subsequent to the suspicion of insider trading involvement. In our opinion, ‘innocent until proven guilty’ applies in all sincerity to this person. However, the suspicion itself can ignite an organizational disruption and a possible effect on future procurement processes. The intrinsic value estimate is maintained at 7 SEK per share with a cash position of approximately 40 MSEK. Furthermore, during 2016 order traction must be realized somewhat in order to justify the mentioned intrinsic values.

PS

Philip Skogby

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