"Services clients such as Barclay's International Funds, the Asian executive search firm Bennett Associates, America's first 3D television network C-3D Digital and the Asian legal firm Hastings & Co "
web.archive.org
DISCLAIMER
THE FOLLOWING RESEARCH REPORT IS PROVIDED FOR HISTORICAL COMPLETENESS ONLY!
The reports which follow were published on the Stockreporter website in the past. Many of the companies detailed in these reports are no longer clients of Stockreporter and are no longer being covered by Stockreporter. These reports are presented solely as a record of past Stockreporter recommendations, so that prospective investors may better evaluate Stockreporter. The information in these reports may not be and in most cases is not current. No investment decision should be made based on any information contained herein as it is out of date and may well no longer be valid. Further, Stockreporter in many cases received compensation from these companies for services which included preparation of these research reports, which should be construed by investors as a potential conflict of interest. Any investor should explore all currently available information including all relevant SEC filings of any such company prior to considering any investment.
04/18/2000
Stockreporter issues research report on ZiaSun Technologies, Inc. (ZSUN).
COMPANY OVERVIEW
ZiaSun Technologies, Inc. (ZSUN - web.archive.org is a leading Internet holding company focused on international investor education, e-commerce and specialized online support services within North America, Asia and Europe. The Company is a global firm with a number of key advantages in technical development and profit creation. ZiaSun's exciting subsidiaries are successfully capitalizing upon innovative and lucrative portions of the Internet industry, including the investment, financial, auction and e-commerce sectors.
Over the past 18 months, the Company achieved a phenomenal growth rate surpassing more conservative analyst expectations as its subsidiaries achieved tremendous improvements in revenues, earnings, customer base and market share. Fiscal 2000 has also gotten off to a dramatic start. Over the past three months, the Company's holdings reported new product enhancements, leading-edge technology initiatives and a new business portal, as well as strategic acquisitions and licenses.
Stockreporter expects this growth momentum to accelerate during the coming year, and to center on growth in European markets and further expansion across the Asian Internet industry. In the next few months, we expect this undervalued stock to benefit from greater access to European investors through its recent listing on the Frankfurt Stock Exchange. We also foresee superior long-term returns as ZiaSun continues to capture dominant market share in lucrative Internet sectors around the world.
Stockreporter anticipates that the Company's success will prompt global investment communities to value ZiaSun in line with companies such as CMGI. We also anticipate that ZiaSun will be trading by year-end at a higher valuation similar to those of leading Internet brand builders such as Yahoo!, eBay and E*Trade in the portal, auction and investment sectors of the Internet industry.
GROWTH MOMENTUM
Since the third quarter of fiscal 1998, ZiaSun Technologies emerged from a restructured shell company into a profitable Internet holding company, and a leading international Internet services provider. This corporate evolution was driven by a series of aggressive and well-planned restructuring programs and acquisitions. The Company's tremendous success and rapid growth momentum also stems from its commitment to leveraging the synergistic opportunities created by its portfolio of Internet holdings.
Yet perhaps the most dynamic achievement during fiscal 1999, in terms of its certain impact on future results and shareholder value, is ZiaSun's proven ability to capitalize on its core competencies. This ability enabled the Company to quickly enter burgeoning sectors and timely fulfill emerging demand in existing markets. It is also what distinguishes ZiaSun as a particularly high-growth investment opportunity over the near and long term.
These core competencies are the key to the Company's accelerated success, as measured by its entry into new geographic markets and industry sectors, its expanding suite of products, its position at the forefront of technology evolution and its strategic alliances and acquisitions. ZiaSun quickly identifies emerging market trends, draws upon its broad technical resources and pursues a rapid time-to-market strategy. These capabilities position it to continue to achieve an early stronghold in lucrative new sectors.
During the coming years, ZiaSun will continue its aggressive growth, all the while maintaining its focus on optimizing earnings and shareholder value by increasing its fundamental strengths and competitive advantages. In fiscal 1999, the Company proved its strategy is successful by acquiring the Asia4Sale portal in the first quarter, investing less than $200,000 to rapidly develop and launch the site in the third quarter, and selling the majority interest for $5,000,000 in the fourth quarter. With a number of dominant market players in its portfolio, ZiaSun is poised to achieve similar success in the next few years. This will maximize shareholder value, especially with dividends available to holdings that have been spun off (as was recently done with Asia4Sale).
As the Company's subsidiaries continue to identify niche Internet opportunities, they enjoy superior expansion opportunities due to an international focus and a rapidly growing international Internet user base. In fiscal 2000, ZiaSun will apply its business model to the European markets. This should create rapid share price appreciation in the near term as ZiaSun continues to increase its top- and bottom-line results.
LUCRATIVE PORTFOLIO
ZiaSun boasts a unique portfolio of Internet holdings with a diverse suite of products, services and technologies. The Company's business strategy focuses on acquiring emerging market leaders operating in niche Internet sectors that are either profitable or close to attaining profitability. ZiaSun's current portfolio includes the following businesses:
Online Investors Advantage, Inc. (http://web.archive.org/web/20010318221145/http://www.i-advantage.com/), a wholly-owned subsidiary, is the leading online investment education firm and is "Highly Recommended" by The Security Blanket, an online education industry analyst. The subsidiary also:
Trained over 8,200 students in fiscal 1999 with 220 workshops held in North America, Australia and New Zealand
Holds dominant market share in the US, where OIA anticipates at least 10,000 conference attendees in fiscal 2000
Launched operations in Australia, New Zealand and Canada last year, and will enter the European market by summer
Has interest from several Fortune 100 firms for strategic alliances
Benefits from the expertise of co-founder Ross Jardine, who co-founded and recently sold iMALL (Nasdaq: IMALL) to Excite@Home for $425 million
Momentum Internet, Inc. (http://web.archive.org/web/20010318221145/http://www.momentumplus.com/), a wholly-owned subsidiary, controls a range of products and services through its operating divisions. The MII subsidiary also:
Services clients such as Barclay's International Funds, the Asian executive search firm Bennett Associates, America's first 3D television network C-3D Digital and the Asian legal firm Hastings & Co
Benefits from substantial cost advantages over US competitors due to its base in the low-cost, incentive-rich free port zones in the Philippines
Swiftrade (http://web.archive.org/web/20010318221145/http://www.swiftrade.com/) is the first online stock trading platform to target overseas investors. It is also the first to enable trading on major stock exchanges around the world (the London Stock Exchange, the Hong Kong Stock Exchange, the NYSE, AMEX, NASDAQ and the OTC BB). The division also:
Delivers international financial news through a partnership with Reuters
Licensed use of its backend program and stock trading agreements to the German investment bank Euro Pacific AG
Intends to launch wireless stock quote access from mobile phones, pagers, PDAs and other devices with Wireless Application Protocol (WAP)
Stands to emerge as one of ZiaSun's most profitable products
Momentum Finance (http://web.archive.org/web/20010318221145/http://www.mfinance.com/) is a free online portal delivering real-time comprehensive financial news and data on US, Asian and European stock markets. The division also:
Enjoys a ranking as one of the world's top 100 financial websites
Receives sponsorship from Barclay's International Funds Asia and the Far Eastern Economic Review
Has a partnership for news content with AFX-Asia, a joint venture between Agence France Presse (AFP) and The Financial Times of London
Earns revenues from advertising and subscription services
Search Dragon (http://web.archive.org/web/20010318221145/http://www.searchdragon.com/) is a business directory and search engine for the Asian region. The division also:
Provides comprehensive information on Hong Kong, Indonesia, Macau, Malaysia, the Philippines, Singapore, Taiwan and Thailand
Receives sponsorship from Barclays International Funds Asia and the Far Eastern Economic Review
AsiaEnet (http://web.archive.org/web/20010318221145/http://www.asianet.com/) is developing and will market the new Asian e-commerce portal Tiger Tooth (http://web.archive.org/web/20010318221145/http://www.tigertooth.com/) to cement MII's position as a recognized leader in Asia's explosive Internet industry. The division also:
Is negotiating partnerships with a number of content and service providers
Will increase cross-marketing opportunities by featuring Momentum Finance, Search Dragon and Swiftrade in the Tiger Tooth portal
Is valued at $10 million based on a recent investment for a 10% stake from the Hong Kong-based venture group Long-Term Partners Ltd.
PINmail (http://web.archive.org/web/20010318221145/http://www.pinmail.com/) delivers a premium web-based email service. The division also:
Enables companies to add free email to their websites - with a complete integrated administration system for quick management of the service
Offers a number of technical advantages over competitive systems such as Hotmail, which Microsoft recently bought for $400 million
MEDIAhits (http://web.archive.org/web/20010318221145/http://www.mediahits.com/) provides a network for Internet banner advertising that is supported by MII's proprietary software. The division also:
Generates 10 million monthly impressions from over 8,000 host sites
Sells advertising space to businesses worldwide and also utilizes the network space to promote ZiaSun's diverse suite of products and services
Momentum Asia, Inc. (http://web.archive.org/web/20010318221145/http://www.mumentumasia.com/), a wholly-owned subsidiary, provides a wide range of compatible graphic design, writing, printing, database management and customer service operations. The subsidiary also:
Boasts an established and profitable operation base
Services prestigious multinational corporations such as Enron Power, Ritchie Brothers, Subic Telecom and FedEx
Benefits from substantial cost advantages over US competitors due to its base in the low-cost, incentive-rich free port zones in the Philippines
ServiceLive (http://web.archive.org/web/20010318221145/http://www.servicelive.com/) provides 24-hour, real-time email and telephone customer service to high-traffic websites. The unit also:
Enjoys explosive demand as the global Internet industry places increased emphasis on premium interaction between businesses and users
Offers substantial quality and cost advantages for high-traffic sites, many of which today suffer from a fragmented and costly operation based on subcontracting home workers to fulfill their customer response needs
ZiaSun hold a 17% equity interest in Asia4Sale Inc. (OTC BB: AFSI - web.archive.org, which comprises a three-part e-commerce portal catering to the global market with home shopping, industrial auctions and business-to-business barter from the Asia Pacific region.
ZiaSun recently issued a dividend of AFSI stock, which is trading in the $10 range, to its shareholders
AFSI expects its AuctionAsia.net commercial auctions unit to generate between $5,000,000 and $8,000,000 in gross annual sales
SYNERGISTIC BENEFITS
The beneficial relationship among the Company's portfolio holdings facilitates entry into new markets, strengthens its subsidiaries' presence in existing sectors and encourages customer loyalty to ZiaSun branded products and services. It also enables ZiaSun subsidiaries to quickly capitalize upon the growth of any one of the Company's products or services.
During fiscal 1999, ZiaSun considerably strengthened these synergies. As its Swiftrade online trading division successfully launched services in the US, London and Hong Kong in the third quarter, the Company's OIA and Momentum Finance operating units benefited from greater international exposure through effective cross marketing. As a result, the Company's subsidiaries are recognized as attractive partners for foreign businesses seeking to establish a foothold or expand operations in Asia.
These growing synergies are also increasing ZiaSun's reputation as an Internet holding company able to accelerate a firm's growth through synergistic business opportunities, cost and performance efficiencies, and superior management advice. ZiaSun also delivers the benefits of its core competencies in technology and business development, customer service, marketing and production. These strengths are of tremendous value to the Company's future acquisition candidates, since they enable rapid adaptation to changing opportunities, which is an increasingly critical factor for long-term success in today's dynamic global economy. They also position ZiaSun to make future acquisitions on very favorable terms.
MANAGEMENT & DIRECTORS
D. Scott Elder, Chairman, is also CEO of the Company's subsidiary OIA, which he co-founded in 1998. Elder's entrepreneurial career encompasses owning and operating two consulting businesses, D. Scott Elder & Associates and The Business Alliance Company. The latter of these firms developed joint-venture marketing and training programs for clients such as General Mills, Proctor & Gamble, Rubbermaid and Zane Publishing (which markets educational programs through Amway). Elder earned a bachelor's degree in communications from Brigham Young University and holds a master's in business administration from the University of Phoenix.
Allen D. Hardman, President, CEO and a director, has 35 years of experience in business development, consulting, manufacturing and marketing, including president of a $24 million worldwide systems integrator. Hardman has a proven track record of restructuring small businesses by establishing the firm's viability, increasing its operating proficiency and profit potential, and establishing strategic alliances and joint ventures to improve competitive positioning. Most recently, he was Managing Director Of Business Development for a consulting engineering company. Prior to that he was Marketing Manager for a packaging systems company, National Sales Manager for a material handling and distribution systems firm and Vice President Of Operations for BestWay USA, ZiaSun' predecessor company. Hardman has an industrial engineering technical diploma from the University of Utah and a bachelor's degree in business administration from California State University.
Anthony Tobin, Vice President, COO Asian Operations and a director, is also President of ZiaSun's MII subsidiary and is a director and manager of the Internet publishing firm Crossbow Consultants Ltd., which works with MII. Tobin has over 25 years of experience in Asia, particularly in Hong Kong, Singapore and the Philippines, and has expertise in journalism, publishing, public relations, marketing, advertising, government information and the Internet. His background also includes previously serving as senior information communications officer in the Hong Kong and Singapore governments, during which time he advised the Prime Minister's office in Singapore on domestic and international publicity policies and implemented new strategies in the Ministry of Information.
Ross W. Jardine, a director, is also President and co-founder of ZiaSun's OIA subsidiary. Jardine co-founded OIA after selling IMALL (a company that he founded and took public) to Excite@Home for $425 million and starting a successful consulting firm that assisted businesses in capitalizing on the Internet economy. His entrepreneurial background also includes establishing the sports marketing and promotion firm Jacobson & Jardine, which served clients such as the National Football League, Indy 500, Kentucky Derby, America's Cup 1992, Nabisco, Albertson's, Coca Cola, Fisher Price, American Home Products and RJ Reynolds. Jardine graduated cum laude from Brigham Young University with a communications degree.
Hans von Meiss, a director, has over 20 years of experience in the finance industry, including financial consulting as well as work in investment banking at Bankers Trust International and Chase Manhattan in London. He previously served as CEO of a number of firms, including Dr. Ing Koenig (a leading Swiss service center for flat steel and industrial fasteners), a publicly quoted Dutch company after its privatization and Swiss Textile Group. Meiss serves on the board of a private bank, an industrial concern, a mergers and acquisitions consulting firm and his own company G. von Meiss. His current work includes investments in Internet-related business and his involvement in financial management and consulting. Meiss received a bachelor's degree in economics from the University of St. Gallen, Switzerland and a master's degree in business administration from INSEAD, Fountainebleau, France.
Dennis E. McGrory, secretary, has three decades of administrative experience as assistant to the city editor for a major newspaper, as a legal transcriber, as a legal assistant, as a paralegal and as the office manager for a large law firm. McGrory is a veteran of the Air Force, where he served as a court reporter and administrative specialist, and is currently the commander of the American Legion San Dieguito Post 416.
EARNINGS PROJECTIONS
Stockreporter estimates the following projections to be realistic and achievable given that ZiaSun Technologies is expected to capitalize upon a number of profit opportunities in the coming months and years. Stockreporter also notes that our financial projections do not factor in future acquisitions, thus indicating that the Company's future revenues and earnings could surpass our current estimates.
Revenues:
Year 2000: $38 million
Year 2001: $50 million
Income (EBIT):
Year 2000: $12 million
Year 2001: $16.5 million
It is estimated that ZiaSun will have approximately 40 million shares outstanding at year-end 2000 and roughly 45 million shares outstanding at year-end 2001. Based on these forecasts, we project the following earnings per share.
EBIT Earnings per Share:
Year 2000: $0.30
Year 2001: $0.36
EVALUATION AND OUTLOOK
In evaluating the upside potential for ZiaSun shares, Stockreporter has applied a revenue multiple of 30, which we expect to be very conservative given that ZiaSun is positioned for more dramatic expansion in the world's fastest growing Internet markets than CMGI (now trading at 50x revenues).
With a recent listing on the Frankfurt Stock Exchange and a listing anticipated on the AMEX in the near future, the Company will benefit from substantially broader exposure to the capital markets. This exposure, coupled by the attraction of its subsidiaries' continued geographic and product expansion plans, should create tremendous upside pressure on the stock and result in ZiaSun trading in line with its peers.
We believe that the investment community has long overlooked ZiaSun stock as well as the Company's unique competitive advantages and explosive growth prospects. Stockreporter expects widespread recognition among investors to increase in the next year regarding the attractive profits and superior growth available in the Asian and European Internet markets. As this occurs, we believe that the broader investment community will come to realize that ZiaSun Technologies is clearly positioned to outperform much of its sector in terms of revenues, earnings and market share.
For information concerning the compensation received for the preparation of this report and other disclosures, see Important Disclaimer and Disclosure Statement
COMPANY OVERVIEW
GROWTH MOMENTUM
LUCRATIVE PORTFOLIO
SYNERGISTIC BENEFITS
MANAGEMENT & DIRECTORS
EARNINGS PROJECTIONS
EVALUATION AND OUTLOOK
|
