GMP Research on Intrinsyc's 4th Soleus win

More great news coming out of Intrinsyc Software (ICS:TSX, a Wellington Financial Fund II portfolio company). People can focus all they want on the impact of a Google phone, but Intrinsyc’s talented engineering team is proving that there are a variety of ways that the Soleus platform can help ODMs and OEMs. Here is the soundbite from the GMP Securities research team:

“Yesterday, Intrinsyc announced its fourth design win for its next-generation Soleus platform with Quanta Computer, the World’s largest notebook computer manufacturer and leading original design manufacturer for enterprise network systems, home entertainment, mobile communication, automotive electronics and digital home products. In March 2007, Quanta stated that the company will shift its strategy away from cellphones and focus on manufacturing personal-digital-assistants (PDAs) and smartphones. The company shipped approximately 2 million handsets last year with handset unit guidance of 3 mm in 2007.

Intrinsyc’s stock reacted positively on its new design announcement with a gain of 17% on volume of 700k shares.

The agreement with Quanta is the fourth Soleus design win for the company. Quanta has also retained Intrinsyc for its wireless engineering services to support, development and integration of the Windows Embedded CE OS on the 3G HSDPA mobile device. The expected launch period for the product is Q3 of 2008.

We continue to believe that Intrinsyc is well positioned to capture an eight-figure plus unit volume opportunity from its Soleus product. Recall that Intrinsyc is targeting consumer-oriented feature phones/converged mobile devices. We have modeled for an additional design win for F08 and as a result there are no changes to our F08 and F09 estimates are $23.8 million and ($0.14) and $33.4 million and ($0.11).

We apply a 3.5x P/S multiple to our unchanged F09 revenue estimate of $33.4 million to arrive at our price objective of $0.95 and maintain our BUY rating. Our investment thesis continues to be predicated on Intrinsyc’s strong management team capturing a significant market opportunity with Soleus within the feature phone handset segment.”

Congrats to Glenda, Randy and the entire team at Intrinsyc.

MRM
(disclosure – Fund II holds warrants in ICS)