Game of Drones: ASX Stock Set for Aerial Uplift? Game of Drones:...

Game of Drones: ASX Stock Set for Aerial Uplift?
Game of Drones: ASX Stock Set for Aerial Uplift?

The summer holidays are just around the corner and it’s almost time to fill the stocking, crack open a beer, wine or soft drink, or just reward yourself with a nifty little toy for all the hard work you’ve put in during the year.
And one of the prized possessions on your shopping list may well be a drone.
But beyond being a great idea for a Christmas present, the main cash to be made from drones is in supplying to the emergency and first responder market.

The global market for Unmanned Aircraft Systems (UAS) – the technical term for drones – is estimated to grow from US$6.76BN in 2014 to US$10.57BN by 2020.
One stock that has just caught our attention is a relatively unknown ASX-listed technology company selling not only into the drone market, but also very useful products for military and law enforcement agencies, including the Australian Defence Force.
This company is currently generating revenue right now from its comprehensive range of military equipment and products – in fact revenue doubled last FY alone.
But its latest product could be a game changer…
This Company’s latest tech generates detailed aerial imagery in real time from a drone, and superimposes it onto existing maps such as Google Maps.

Game of Drones: ASX Stock Set for Aerial Uplift?
This company’s latest product may soon be a must have for drones in use by government, law enforcement, and first responder agencies – and consequently has significant commercial potential.
Beside the drone technology, the company was awarded a contract by the US Department of Defence, which will see its advanced lightweight hard armour plates rigorously tested.
If this company satisfies the US DoD that its armour plates are up to scratch, this could rapidly open the gates on large defence contracts.

Validation from the US DoD would also validate this tech in the wider, global market…
The Company is currently valued at just $8.25M and is tightly held – and given there are major catalysts on the horizon, this stock could move quickly.
At the same time, this is a small tech company and a speculative stock – please do your own research before considering as an investment.
So with over $12M in annual sales, $10M in equity funding if needed, and zero debt, we introduce you to XTE

Game of Drones: ASX Stock Set for Aerial Uplift?
XTEK Ltd (ASX:XTE) is a small but thriving defence contractor that secured over $12M worth of sales last year. The company, founded in 1978 and listed in 2005, has quietly gone about developing a range of products for military and security purposes.
XTE doubled its revenue from FY14 to FY15.

Beyond its existing sales, after years of intensive research and development (R&D), XTE has produced two distinctive and cutting-edge innovations:

1. XTclave^TM (body armour), and;
2. XTatlas^TM (contextual, real time video for drones) which should give it a much larger springboard to bounce into the global $2.1TN defence industry.

This company is also just months away from finding out whether the US Department of Defence (DoD) would like to embrace its manufacturing technology for the production of future extra light and strong body armour.
So far we’ve only concentrated mainly on the drones aspect to this company, but a potential armour deal with the US DoD…
…could unlock a huge contract into what is a very large American market.

The US has one of the highest spending military bodies in the world, spending over $600BN per year – and what they buy often has an impact on the wider market.
This news could be a major catalyst for XTE.
In the coming months and after an intense two-year trial period, the US Armed Forces will finally see first-hand the benefits of XTE’s product.


Game of Drones: ASX Stock Set for Aerial Uplift?
Any US deal will come on the back of a recent $7.7M Australian Defence Force (ADF) purchase order and the sale of its broader products.
Imagine what XTE could do if it were to supply the US military – remember they spend over $600BN per year…
Having said that, there is no absolute guarantee that XTE can unlock significant revenue in a US deal – at this stage the company is participating in development and testing work only.
Before we get to ahead of ourselves, let’s take a look at XTE’s performance over the past four years