Integrated Media investors get a 50pc profit downgrade for Christmas
A Chinese 3D imaging company has slashed its profit forecast in half, just five months after listing on the NASDAQ and three weeks after the chairman sold out.
Integrated Media Technology (ASX:ITL), which until last year was called China Integrated Media Corporation, says both revenue and profit will be half of what they were in 2016.
The company made $14 million in revenue last year and and a $3.6 million profit.
The severe downgrade was largely because the business couldn’t shift its key piece of technology, 3D autostereoscopic displays.
For the past two years, the company has been investing in this technology, which allows people to see 3D images on a screen without needed to wear glasses.
“The group will put most of its resources into the development of this business stream,” it said in a half year report released in September.
The chairman and CEO, Dr. Herbert Ying Chiu Lee, told shareholders that sales of 3D autostereoscopic products, software and technology solutions had dropped substantially, but didn’t provide any figures.
Furthermore major customers had delayed rolling out 3D autostereoscopic digital signage and there had been a delay in “some sales orders of technology solutions”.
Integrated Media Technology has been contacted to find out why sales fell so dramatically.
The company’s share price didn’t move from $6.74 on Friday, and the stock is very lightly traded.
That is, except on November 23 and 24 when 26,0000 shares were sold.
On November 23, Dr Lee got rid of most of his shareholding via a share swap.
He swapped 51 per cent of his Integrated Media Technology shares, owned via a business called Marvel Finance, for those in a subsidiary of Chinese industrial products maker Cleantech Solutions.
Cleantech Solutions’ subsidiary is now the majority owner of Integrated Media Technology. Twenty shareholders hold 90 per cent of the register.
But Integrate Media Technology still owes Dr Lee’s company Marvel Finance $17.8 million as a deferred performance fee for Marvel Digital, which it bought in 2015.
The company listed on the NASDAQ in August, after consolidating shares at a range between one for every 20 shares and one for every 40 shares owned to meet the American bourse’s minimum share price requirements.
Dr Lee said it was to “provide direct access and much greater visibility of our business to one of the world’s largest debt and equity markets”.
It has a market cap in Australia of $17.8 million and in the September quarter had $3 million cash to play with.