Bittium, a hidden golden egg?

Have you ever heard about a technology company called Bittium? If you answered no, now you hear something about this potential golden egg from Finland. The company located Oulu and they are building a new bigger headquarters right now. The firm is old Elektrobit, actually part of it because they sold Automotive business unit. A German giant Continental bought Automotive from Elektrobit by giving 600 million euros cash 1.7.2015. After the deal Bittium focused on Wireless, a minor business unit.

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Bittium´s stock price.

Bittium is a small company at the moment but it´s working on megatrends market. One of the megatrend market is Public safety. Bittium offers solutions for defence-, safety- and other authority markets. The second megatrend is LTE-technology. Data transfer multiply in the future and Bittium has strength offer solutions for LTE-markets. The third megatrend is IoT (Internet of Things). Bittium offers solutions for industry to connect machines to the internet. One of the most interesting things is that Bittium has GE Healtcare in a reference list. IoT in healthcare markets will increase rapidly in a few years report experts.

So company doesn’t have only one thing in its business. Bittium has a large list of products which are able to hit the markets hard. Biggest hype creates Bittium Tough Mobile. It`s Android based mobile phone for Mobile Security and Public Safety markets. Currently the demand for safety phones increases speedily because there are cases where information via phone has leaked for wrong persons. Authorities also needs own safety network and phones for the authority use. Now shareholders are waiting for good news from Mexat and Firstnet because Bittium competes in these projects in order to get Tough Mobile selected. These projects by authorities are worth of tens of millions dollars.

As other shares, there are analysist who are following Bittium. Three of the analysists are OP, Inderes and Evli. Two of these analysist are pessimists, Evli and Inderes. They didn’t like a news that Ericsson, partner, decreases cooperation with Bittium because Ericsson has to cut down charges. These two analysist have an opinion that next year Bittium is unable to reach a company´s target, 10% growth per year in revenue and operating income, between years 2015-2017. OP didn’t change the target price downward for share. This is a good thing for shareholders because investors can think that OP knows best the situation of the firm. And the reason is: OP organized company acquisition between Elektrobit and Continental. Actually OP elevated the target price to 6,6 euros, so investors can think OP has confidence for Bittium.

Maybe the worst thing for investors is the company`s information policy. They don’t disclose too much for public. For example Finnish company, KONE, announced that they are going to connect their elevators to the internet (IoT). Same time something interesting happened at Bittiums reference list: KONE`s logo appeared for the list. Result is: Bittium haven’t announced anything about this partnership. Bittium justify that they can´t told about contracts because they have secrecy obligation. Okay, maybe it is true, Bittium does business at Public Safety markets and so on.

Other funny case is cooperation between Bittium and Harris Corporation. Enthusiastic investor´s found out that Harris sells the same phone than Tough Mobile in different name. In this case it is white-labeling product. Again, there is no information for the public. And maybe there is no information for long time about this Harris-case. Probably they have very strict contract so Bittium can´t disclose any specific information. Investors can view interim reports.

All in all, Bittium is one of the most interesting companies in OMX Helsinki. Hot megatrends will elevate share high, but you have to remember that it will take a few years or more. And of course, risks are high. If the company keeps information policy similar than recently, it requires a nerves to own the shares. But fuse already lit. CEO Hannu Huttunen got a question from Osakeareena: “Why Tough Mobile could fail on Safety Phones market?” Huttunen answered confidently: “We do not believe it will fail.”

 

 

http://www.kauppalehti.fi/uutiset/elektrobit-myy-automotiven-suurkaupassa—rahat-osakkeenomistajille/u2DLzeFw

http://www.bittium.com/bittium_lyhyesti/tietoa_ja_taloudellisia_lukuja/tietoa_yhtiöstä

http://www.sijoittaja.fi/29683/bittiumissa-kova-kasvupotentiaali/

http://www.grandviewresearch.com/industry-analysis/internet-of-things-iot-healthcare-market

http://www.formin.fi/Public/default.aspx?contentid=352366&contentlan=1&culture=fi-FI

http://osakeareena.fi/viewtopic.php?f=27&t=325&start=10

http://www.kauppalehti.fi/5/i/porssi/porssikurssit/osake/index.jsp?klid=1117

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2 Responses to Bittium, a hidden golden egg?

  1. tonipiironen says:

    Very interesting topic Onni! You have handled topic with many visual angles.

  2. samisikstus says:

    Cool story Onni!

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