next technology company success story

I dont often get too excited about individual stocks, but have been following DDT for quite a while now.

DDT have patented technologies that have far-reaching effects in the fight against counterfeiting and stealing of goods.

These are the reasons (I believe) DDT will be the next technological success story from Australia

* Their patented technologies allow them to mark items inside the product. This means that the identification of items is part of the makeup of the item, meaning it cant be rubbed off or altered without damaging the product. One technology even marks at DNA level

* Readings of markings can be achieved without any specialised equipment

* An endless number of applications can be devised in all sorts of industries and for all sorts of products

* Companies save immense amounts of money out of applying these technologies as well as improving quality by ensuring original parts/items are used. They are therefore readily willing to spend money to achieve these results

* For one of their technologies they have a joint venture company with CSIRO adding substantial backing to authenticity of the technology

* Barrier-to-entry is very high as 1. the products are patented, and 2. it is highly sophisticated and cutting-edge technology that cant just be copied. In fact theoretically they could use their technology to ensure their techology is not counterfeit....hmmmm

The last announcement on the 22nd of company update gives an awesome update of the potential this company will realise over the coming year or more. Some highlights for me were:

'DataTrace is currently engaged in technical due diligence with some of the biggest and best
known manufacturers of paints and polymers in the world based in Asia, Europe, the Middle-
East and North America. During March and April 2006 DataTrace will be performing
detailed technical testing at the request of several of these manufacturers. These organizations
are all targets of counterfeiting and illegal substitution leading to bogus warranty claims.'

'In Australia each year around 50 million cubic metres of concrete are produced with about
30% of that volume being a candidate for the new DataTraceDNA Homogeneity Solution.
The worldwide production of concrete used in high-rise buildings, pavements and freeways is
measured in billions of cubic metres.
In NSW alone the Roads & Traffic Authority budget for remediation work is over $600
million this year.'

'The counterfeit spare parts industry is in growth mode, this year costing auto makers at least
US$12billion, as reported in March 2006 by the ICC Counterfeiting Intelligence Bureau
based in Europe. Not only are original manufacturers robbed of this revenue by bogus parts
but vehicle owners are unknowingly subject to serious safety risks. This is a problem not
confined to motor vehicles. It is also prevalent in the airline industry, which emphasises the
risks to which the travelling public are exposed. It is a problem that can be solved because
DataTrace has now pioneered a method of molecular marking of metals post-manufacture,
thereby enabling manufacturers to invisibly mark their parts and police the use of them
throughout their supply chain'

'Everyone is acutely aware of the threat of terrorism and in particular terrorist use of
explosives. It is far too easy for terrorists to make and detonate explosives and for law
enforcement to have little if any chance of proving the origin of the materials. However,
Governments now have the opportunity to legislate for the components of explosives to be
tagged with technology such as DataTraceDNA so that law enforcement and forensic
investigators can identify their source. By tagging explosives’ components with
DataTraceDNA it is possible to use our digital scanner either before or after a blast to
confirm the origin of the materials.
Testing of our explosives marking system is concluding in March with the CSIRO
monitoring a series of tests taking place in several official explosives ranges.'

It goes on and on, the biggest issue for DDT at the moment is to manage the potential by concentrating on the areas that have the most urgent need and will provide the highest profit margins for the company. It is clear at a marketcap of about $30mill that the ramifications of this technology has not yet been fully understood. Revenues are increasing and should rise substantially from this point on. With that I'd expect the shareprice to increase as well over time.

There really is not alot (any?) downide that I can see with this company for those with a medium-term view.

Interested to hear others opinions

Cheers