ORS delivers explosive revenue growth and continues to expand its customer base in traditional and new markets. For the first half of FY 2007, revenues surged 43% compared to the first half in FY 2006. At the beginning of 2007, ORS changed its business model in an effort to avoid becoming a pure cell phone commodities player. Management shifted the focus of operations to mid-level and high-end products, and the result has been greater profitability for the Company.
ORS is set to deliver its initial shipment of the Proxlink X180 to the law enforcement employees of the Hebei Bureau Administration of Industry and Commerce (Hebei-BAIC). This deal is valued at approximately $322,250 and is expected to be a stepping stone in an annual procurement program of specialized law enforcement mobile units for the Hebei provincial government. ORS expects that during the next 12 months, over 10,000 local law enforcement officials will become users of the Proxlink X180 handsets. In a competitive bidding war with three other companies, ORS emerged as the exclusive provider of units for the initial order.
The RedChip analyst concluded, “At a current price of $2.20, ORS trades at only 6.3x projected FY 2007 earnings and at 1.4x projected FY 2007 sales. We believe that ORS will continue to experience rapid and sustained growth with a strong contribution from the sales of specialized application devices. We believe that ORS has significant upside potential and maintain a “Strong Buy” rating. We have established a new 12 month price target of $6.65 based on a multiple of 19x FY 2007 EPS of $0.35.
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