stoploss,In answer to your (1), ETC is trading on a tiny...

stoploss,

In answer to your (1), ETC is trading on a tiny earnings multiple due to a combination of the following: First, the stock is still basically an unknown to most sophisticated Australian investors who specialize in small cap industrials/tech. Because ETC is still an unknown, many punters who would otherwise by buying, are sitting on the sidelines (or are yet to even discover ETC). Second, even amongst those who have been bringing themselves up to speed on ETC over recent months, there remain inevitable uncertainties because ETC has such a thin market history. So while the headline forecasts look great, there are many sophisticated investors/instos who are choosing to wait for the actual numbers to come out (along with the detail of an annual report) before buying. And there other investors still who, while interested in ETC, aren't permitted to invest in ETC until the company is in the ASX300. Third, Sovereign Key and QIC have been selling on market recently for non-company specific reasons (as per my last post). Knowledge of QIC and SK selling has allowed insto buyers to program their bots accordingly and buy at the cheapest price possible (e.g., you will often see the buyer's bot push down the closing price with the sale of one share). The final reason for the low share price is just general market sentiment. There was a marked pull back from risk in mid June, and while the large caps have started to gain ground recently, many small caps like ETC have yet to follow suit.

The key point to keep in mind during this period while the share price is depressed is that the top 40 shareholders (= those who have done the most research and have the most at stake) have continued to increase their holdings.

As I have said in past posts, if ETC hit their $48mill profit target and give a positive outlook for FY10, and assuming the wider market/macro economy permits an appetite for risk, then the key issues described above will be largely neutralized, and the share price is likely to start marching towards (and eventually north of) $1. Winning the Vietnam contract (and others) will accelerate the price climb, but the price climb is not dependent upon winning these contracts.

Regarding your (2), the technology behind TPID is part of the China Gas tank project, but is separate from ETC's contract. In simple terms, ETC has the contract with AQSIQ for the customer ID cards, while the owners of the TPID technology have a separate contract with AQSIQ for imprinting the metal fabric of the actual gas tanks with their ID technology. So the AQSIQ have decided upon a dual technology solution, of which nexcode is one half. The key point here is that ETC's contract is independent from the TPID contract. This means that ETC's role in the china contract is not dependent in any way upon the owners of the TPID technology, nor is it even dependent upon the TPID technology itself.