Datasea Inc. (DTSS) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001631282

P/B 2.80

P/E -2.55

P/S 0.13

Market Cap 8.48 Mn

ROIC (Qtr) -56.50

Div Yield % 0.00

Rev 1y % (Qtr) -34.47

Total Debt (Qtr) 3.44 Mn

Debt/Equity (Qtr) 1.14

About

Datasea Inc., a technology company based in Nevada, USA, with operations in Delaware, USA, and China, is a leading player in the field of intelligent acoustics and 5G messaging. The company's primary business activities include the development and sale of products and services related to ultrasound, infrasound, directional sound, and Schumann resonance, as well as 5G messaging. Datasea generates revenue through the sale of its products and services, with the Chinese market being its primary source of income. The company's main offerings include...

Datasea Inc., a technology company based in Nevada, USA, with operations in Delaware, USA, and China, is a leading player in the field of intelligent acoustics and 5G messaging. The company's primary business activities include the development and sale of products and services related to ultrasound, infrasound, directional sound, and Schumann resonance, as well as 5G messaging.

Datasea generates revenue through the sale of its products and services, with the Chinese market being its primary source of income. The company's main offerings include high-quality sonic air disinfection solutions, skin repair and beauty solutions, and sleep-aid devices. These products are primarily marketed to customers in the healthcare, beauty, and consumer electronics industries located in China.

The company's intelligent acoustics business is at the forefront of the industry, with a particular focus on ultrasound, infrasound, and directional sound. Datasea has developed a range of innovative products in this field, including ultrasonic air sterilization products, skin repair robots, and sleep monitors. The "Hailijia" series of ultrasonic air sterilization products, for instance, utilizes ultrasonic high-speed coupling and thermal cavitation effects to comprehensively disinfect and sterilize against various pathogens. This product line has been tested by an authoritative third party and has achieved a 99.83% disinfection rate against COVID-19 in just nine seconds.

In addition to its intelligent acoustics offerings, Datasea provides 5G messaging services to enterprises and brands. This service, known as RCS, integrates phones, messages, and contacts, enabling users to enjoy various effective interfaces with integrated messages, including texts, pictures, audio, video, and emojis.

Datasea has established key agreements with several customers, including Chengming Shengyuan, which has committed to purchasing at least 100,000 Hailijia air purifier units with a purchase value of approximately $20.5 million (RMB 150 million) from November 2022 to November 2023. The company has also signed a cooperation agreement with an online distributor, Aierfu, who will sell the "Hailijia" series of acoustic intelligent air sterilization products on multiple major e-commerce platforms.

Datasea's key suppliers for its Hailijia air disinfection and sterilization products series include Guangdong Hakebao Environmental Technology Co., Ltd., Shenzhen Ajison Environmental Protection Technology Co., Ltd., Shenzhen Antuopu Technology Co., Ltd., and Komi Intelligent Manufacturing (Shenzhen) Co., Ltd. The raw materials used in the Hailijia air disinfection and sterilization products series primarily include 40KHz ultrasonic kill module, Shipu DC brushless motors, temperature and humidity sensors, dust sensors, ultraviolet lamps, and other components.

Stock Price Chart

Analysis

Pros

Operating cash flow of (762726) provides exceptional 5734.78x coverage of minority interest expenses (133), showing strong core operations.
Tangible assets of 3.08M provide exceptional 17.08x coverage of deferred revenue 180195, showing strong service capability backing.
Operating cash flow of (762726) fully covers other non-current liabilities (180195) by 4.23x, showing strong long-term stability.
R&D investment of 1.32M represents healthy 7.35x of deferred revenue 180195, indicating strong future innovation pipeline.
Cash position of 745264 provides strong 4.14x coverage of deferred revenue 180195, ensuring service delivery capability.

Cons

Operating cash flow of (762726) barely covers its investment activities of (5.59M), with a coverage ratio of 0.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (5.59M) provide weak support for R&D spending of 1.32M, which is -4.22x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of (762726) provides insufficient coverage of deferred revenue obligations of 180195, which is -4.23x, raising concerns about future service delivery capabilities.
The company's operating cash flow of (762726) shows concerning coverage of stock compensation expenses of 1.77M, with a -0.43 ratio indicating potential earnings quality issues.
High receivables of 1.17M relative to inventory of 200534 (5.84 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.37	2.56
EV to Cash from Ops.	-13.80	38.32
EV to Debt	3.06	-11.37
EV to EBIT	-3.17	-12.79
EV to EBITDA	-5.99	7.72
EV to Free Cash Flow [EV/FCF]	-13.71	24.22
EV to Market Cap	1.24	0.58
EV to Revenue	0.16	-35.00
Price to Book Value [P/B]	2.80	3.74
Price to Earnings [P/E]	-2.55	-18.61

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	0.00	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	42.12	-404.11
Cash and Equivalents Growth (1y) %	-20.51	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	75.03	31.15
EBITDA Growth (1y) %	86.19	49.02
EBIT Growth (1y) %	75.08	25.85
EBT Growth (1y) %	75.08	17.82
EPS Growth (1y) %	91.40	70.69
FCF Growth (1y) %	-93.76	295.45
Gross Profit Growth (1y) %	472.83	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	8.37	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.18	1.21
Current Ratio	0.67	2.57
Debt to Equity Ratio	1.14	-0.93
Interest Cover Ratio	0.00	-13.15
Times Interest Earned	0.00	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	-2.60	-544.82
EBIT Margin %	-5.16	-197.78
EBT Margin %	-5.16	-602.74
Gross Margin %	5.30	52.06
Net Profit Margin %	-5.20	-605.52

Datasea Inc. (NASDAQ: DTSS)