Gefunden im WO Board: Trintech (TTPA/NASD $0.52) _________________________________ http://finance.yahoo.com/q?s=ttpa&d=t
Investor Relations: Ruth Cotter - ruth.cotter@trintech.com www.trintech.com
This past month we were caught with bad timing on what was hoped would be one of our better technology picks for the next 12 to 18mths. A collapsing sector combined with Trintech`s temporary Q1 revenue shortfall and share rollback (to preserve the Nasdaq listing), resulted in heavy selling pressure from existing shareholders who did not fully understand this market potential. With most of the weak paper shaken from the market, now is a good time to address some issues for existing shareholders and hopefully improve your comfort level. Financials will be released the end of May and we believe the CEO`s conference call and 2002 guidance will also help elevate the confidence level and generate additional buying.
By now everyone is aware that this company has no debt, trades at a substantial discount to approx. $45 million in the bank, and has over 2000 clients worldwide. Once the share rollback occurs they will have approx. $3/share in cash and trade in the low $2 range.
I believe part of the problem with Trintech (from the perspective of North American investors), resides with the fact very few people are familiar with smart card technology or the growth it represents. Frost & Sullivan forecast growth for financial smart cards within the European Union of 49% in 2003 and 44% in 2004. Growth in North America is 14% in 2003 and 19% in 2004. Growth from 1999 to 2001 was almost non-existent in the United States.
Very few people in North America even know what a smart card is - a plastic card with an embedded chip that has memory and logic. They can be used for banking or credit card transactions, mobile phone ecommerce, transportation, PayTV, security access, etc. From 1999 to early 2002 the growth of smart cards in the United States was in the single digits. While at the same time they are spreading through the rest of the world like crazy. The trend is shifting however in North America with growth jumping to 14% in 2003 and 19% in 2004.
The relevance to Trintech is the fact that they are one of the leading companies in the world with technology built into smart cards. Recently Trintech signed up a U.S. retailer with over 700 stores so they have proven their ability to incorporate proven technology into North America. However, because few North American investors have even seen a smart card, they see no reason to invest in it. One of the keys to speculating in smallcap growth stocks is to spot strong trends ahead of time. Smart cards have had a very slow start in North America but are the wave of the future to prevent fraud, increase consumer convenience, and improve national security.
Below I have pulled useful statistics from a March/02 SchlumbergerSema report and from previous Trintech reports. I believe this will improve your comfort level and hopefully in time this value and growth potential will be reflected in the stock price.
http://www.epaynews.com/statistics/scardstats.html (additional statistics)
GROWTH OF SMART CARDS - 2003 vs 2002
Mobile Communications: 550 million units (+22%) Banking: 220 million units (+22%) EGov/PayTV/Transport/IT Security: 357 million units (+36%)
By REGION
Europe & Middle East Africa: +46% Asia Pacific: +31% Latin America: +19% North America: +4%
By TECHNOLOGY
Memory Cards: 1.1 Billion Units (+55%) Microprocessor Cards: 962 Million Units (+45%) Multiapplication Cards: 530 million Units (+55%) Java Cards: 336 million units (+63%)
The fast-growing markets and application sectors for smart cards generally involve microprocessor-based technology and multi-application capabilities. SchlumbergerSema predicts that by 2003, 50% of smart card shipments are expected to support multiple applications. Moreover, the open JavaCard standard for multi-application cards -- building on its unchallenged leadership in mobile communications -- is expected to attain industry-wide domination in the same timeframe.
The establishment of smart cards as the portable client device of choice for automating consumer services and managing customer relationships is a further indisputable trend, which has already led to the emergence of a new breed of systems house.
"With very large rewards for card-adopting organizations, the challenge is now one of design, integration and service," stated Rasmussen. "The successful card players of the next few years will be companies that can provide optimal customized solutions, from the card itself through full system integration to operational services."
"Smart cards are now a worldwide phenomenon in mobile communications," commented Xavier Chanay, vice president, Mobile Communications products, SchlumbergerSema. "The rapidly increasing capacity of cards, plus their major role in supporting revenue-generating, value-added services make them the ideal device for supporting the key business objectives of leading-edge mobile communications companies."
Banking - a solid business case for growth
The financial market represents the next largest application sector for smart cards, and it is proving to be relatively immune to economic fluctuations, largely because of the long cycle times associated with projects. This market grew by 21% in the last year, a strong performance driven by the country-wide projects that are replacing existing magnetic stripe bank cards with smart cards -- such as the UK`s conversion to smart cards in 2001.
The EMV (Europay MasterCard Visa) specification continues to dominate the industry, with Brazil, Korea and Japan emerging as the newest smart card financial markets, and the UK entering a maturity phase. The case for smart cards in the banking industry was originally built on controlling fraud. Today, applications are increasingly focused on winning and retaining customers by offering innovative multi-application cards with multiple services, such as credit, debit, e-purse and cash dispensing facilities; new functions such as loyalty, secure remote access to accounts; and even non-banking applications like healthcare.
Technologically, a number of platforms - notably JavaCard and Multos -- are still competing for leadership in open standards, but none is expected to become dominant in the near future. One prediction from SchlumbergerSema is that the banking sector is likely to be the first volume adopter of the company`s USB-compatible e-gate smart cards, which enable high security, smart card-based services to be easily used over networks for authentication and payment.
Public sector ID Cards offer growing prospects
Although the government-driven card application sector involves large volumes, and is the next largest consumer of microprocessor-based smart cards after mobile communications and banking, it is still in its formative years. This makes it extremely sensitive to individual projects, and near-term growth forecast partially relies on an extension of existing projects.
Several countries are currently tendering for national ID cards, with some projects expected to reach their roll-out stage during the next two years. Numerous other countries are currently starting to consider options in this area, partly as a result of heightened security concerns stemming from the events on September 11. This is particularly true in North America, where both government and businesses are exploring new ways to protect the security of their IT networks and buildings without compromising the privacy of individuals. In the US, the Department of Defense is rolling out Java multi-application cards for physical identification and building/network access.
Technologically and organizationally, this sector is one of the most challenging for the smart card industry. From a technological standpoint, the cards must support a sophisticated PKI to achieve the highest level of protection against counterfeiting. This necessitates powerful on-card cryptographic processing capabilities. The physical structure of the card is also crucial - it must exceed normal durability standards, as well as support graphical and printing techniques that provide equal or higher security than bank notes.
A second factor is the public sector`s growing demand for end-to-end support. As SchlumbergerSema predicted in past years, this drive for complete solutions is a fundamental factor behind recent consolidation and change in the smart card industry. Industry survivors in this sector must offer end-to-end solutions that include mini-smart card personalization factories, distributed network systems and interfaces with back-office national computer systems.
Transport applications are moving smoothly
The transportation sector has progressed to an interesting phase. The established productivity and business benefits of contactless card technologies for ticketing and tolling are now spreading out from high-profile mass transit applications in major cities to numerous smaller-scale projects in mid-sized cities and towns.
Smart cards for Pay-TV applications ensure security in the digital age.
The Pay TV market for smart cards is already substantial. Although it is likely to grow only sporadically in the short term, it is potentially a star in the smart card industry`s future as cable and satellite set-top box card systems come up for renewal every two to three years.
Because they are simple to use, low cost and easily replaceable, smart card technology is now fundamental to security management for the pay TV industry. The transition to all-digital delivery for terrestrial/national TV channels, the emergent business models for digital rights management for high-value content providers in areas such as sports and films, and operators` desire to leverage customer bases by marketing set-top boxes for Internet access indicate enormous growth prospects for the smart card industry in 2005 and beyond.
IT security emerges as newest major application
For the first time in the annual SchlumbergerSema smart card review, IT security applications are covered as a separate application segment. Although still involving small numbers, smart card-enabled IT security is experiencing explosive growth. Smart cards are providing a user friendly and convenient tool for implementing enterprise-wide security for physical access to premises, as well as logical access to computers and private/public networks.
SchlumbergerSema expects the IT security sector to more than double each year for the foreseeable future, and the technology is expected to start penetrating mid-sized and smaller organizations over the next couple of years.
Winners will deliver end-to-end customized solutions
The fast-growing markets and application sectors for smart cards generally involve microprocessor-based technology and multi-application capabilities. SchlumbergerSema predicts that by 2003, 50% of smart card shipments are expected to support multiple applications.
The establishment of smart cards as the portable client device of choice for automating consumer services and managing customer relationships is a further indisputable trend, which has already led to the emergence of a new breed of systems house.
"With very large rewards for card-adopting organizations, the challenge is now one of design, integration and service," stated Rasmussen. "The successful card players of the next few years will be companies that can provide optimal customized solutions, from the card itself through full system integration to operational services."
STATISTICS (GROWTH OPPORTUNITIES)
Europay, MasterCard and VISA are insisting on a rollout of EMV compliant chip cards by 2005. VISA believes that 90% of European VISA cards will carry a chip by 2005 and has declared that, by 2005, any European banks that have not invested in chips should be responsible for any fraud losses that chips would have prevented.
In addition, the software that enhances the functionality of these smart cards is becoming increasingly important and a way for card manufacturers to migrate up the value chain. Gartner Group estimates that smart cards will grow at a rate of 32.4% per year to reach over 1.76 billion units by 2004./(3)/ According to Dataquest, the worldwide smart-card market should grow from a value of US$2.2 billion in 1999 to US$9.1 billion in 2004, representing a Compound Annual Growth Rate (CAGR) of 33%.
Debit card usage is also growing strongly. According to the Nilson Report, the number of U.S. consumer purchases is projected to grow to 152 billion by 2010, up from 79 billion in 1999. The portion of these payments conducted electronically is expected to rise from 25% (28 billion) to 47% (71 billion) during this same period, with half of this growth coming from debit card usage. Nilson estimates that debit transaction volumes will grow by a Compound Annual Growth Rate of 14.5% between 1999 and 2010 (a Compound Annual Growth Rate of 19.2% between 1999 and 2005).
gruss, BigBlender
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