PFNH .19 What you need to know about this company
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Today, companies must rely on the fast, accurate exchange of information such as e-mails, files and other data across their networks and the Internet. The amount of data exchanged is growing inexorably as the level of commerce, the proliferation of personal computers (PCs), and the ease of access to the Internet all steadily increase. But existing network processing technology cannot keep pace with the growing traffic. This brings up several critical problems for companies today:
Bottlenecks increasingly arise in the networks.
Information is exchanged too slowly.
Day-to-day operating efficiencies are reduced.
And, ultimately, the bottom-line performance of enterprises is affected.
Stepping squarely into that problem is Perfisans Networks (OTC BB: PFNH - “Perfisans”), a fabless semiconductor company focused on the growing Gigabit Ethernet markets in the small and medium enterprise, and the rapidly growing SOHO sectors.
OFFERING SOLUTIONS
Perfisans offers solutions based on its own proprietary, leading-edge Gigabit Ethernet Accelerator technology. The benefits of this technology include:
The elimination of network bottlenecks – dramatically faster data transfer rates.
Significantly improved operating efficiencies.
Improved bottom line performance.
In simple terms, Perfisans achieves this profound increase in network performance by off-loading, from host central processing units (CPUs), the burden of processing the network address information. This address information, which gives the network its instructions on where to send a file and how to handle it, is steadily increasing in both size and complexity – and therefore is a main contributor to the bottlenecks and low data rates currently affecting companies around the world. Perfisans’ technology frees up the host processor to concentrate on quickly moving the data across the networks – at a minimum rate of 80% faster.
DELIVERING SOLUTIONS
Perfisans delivers its solution in competitive chip-level and board-level implementations at about 10% of the cost of other solutions available today. These chips go into products and applications such as personal computers, servers, routers, storage area network systems (SANS), network interface cards (NICs), host bus adapters (HBAs) and PC motherboards, as well as content delivery networks, broadband networks and rich media streaming.
While many technology ideas sound promising on paper and work well in the lab, Perfisans' technology has been proven in the real world.
PROVEN RESULTS
The company has booked $2 million in orders in recent months, and computer original equipment manufacturers (OEMs), which have tested, accepted, and endorsed Perfisans' technology. OEMs, a particularly promising (and extremely large) market, welcome Perfisans' technology for multiple reasons. These include a measurably superior product, competitive price-performance mix and ease of design.
Perfisans offers production-ready board level designs, providing:
Faster time-to-market.
Significantly reduced product development costs.
Total customer support from product conception through to mass production.
A comprehensive OEM-vendor business partnership to enhance bottom line performance and time-to-market.
Wire-speed Gigabit performance in a low-cost system on a chip (SoC) solution.
Comprehensive standards compliance, including IEEE 802 suite.
Full backward compatibility with 10/100 Mbps Ether-net systems. Enterprise users can upgrade to Perfisans true Gigabit performance level without the need to acquire additional costly hardware and simply "plug in" a new module equipped with the Perfisans chip.
ARCHITECTURE AND PERFORMANCE
The architecture and performance of this technology is worth a close look because, from an engineering standpoint, it is nothing less than elegant. In short, the Perfisans engineering team, led by co-founder To-Hon Lam, has developed a unique chip architecture which, utilizing a proprietary, patent-pending, modular technology, yields smaller chip sizes – which means lower production costs. This methodology also permits scaling Perfisans' chips to progressively greater performance levels without the constant need for complete chip re-design. This allows the company to introduce product solutions quicker and cheaper that its competitors. As a result, Perfisans can produces higher-performance chips with development costs far lower than industry norms. Compared to Perfisans' solutions, competitors, in an attempt to match Perfisans' true gigabit performance, employ overkill architectures, resulting in large and power-hungry chips that are costly to produce and operate.
It's not surprising that Perfisans' products are gaining recognition and market share around the world, especially among the high-volume OEMs in China and Taiwan (where more than 80% of all motherboards for desktop computers are manufactured). It appears Perfisans' scalable, modular chip architecture will enable it to continually expand its market penetration with its program of product introduction, leading to related applications.
MARKET DEMAND
Demand for Perfisans' products is pulled by several factors which will continue growing well into the foreseeable future. These include the growth in business and governmental information exchange; the proliferation and lowering costs of PCs (131 million new PCs are shipped annually every year, and each PC represents a potential home for Perfisans' products); the huge growth of, and access to, the Internet; and the general growth in developing countries and of the global population. In fact the global total available market (TAM) for Perfisans' products is estimated at USD $1 billion this year alone. This reflects a 50% annual growth rate since 1991, and the TAM is widely expected to continue increasing.
Perfisans Networks' Competitive Edge.
Strong and persuasive price advantages. For example; Perfisans Gigabit NIC cards will sell for less than $100, compared to competitive lower-performing NICs selling for between $500 and $800 per unit.
Relevant, strong management experience and skills.
High gross margins (50% or greater).
Highly competitive, performance-leading products
A lean, tightly-run and highly motivated team
Fast time-to-market of winning products.
While having great products that outperform the competition and sell for less are huge advantages, Perfisans has yet another advantage:
GREAT RELATIONSHIPS IN THE ASIA REGION
With its co-founders from Taiwan and Hong Kong, Perfisans has an insider's view of the markets in China – and strong market/business relationships in key growth regions of Taiwan and China are nothing less than essential. Why? Because more than 80% of desktop and 50% of laptop computers are built in Taiwan and China. These manufacturers produce computers for major brands such as HP, Compaq, Dell and IBM. That's why first-class relationships, and an intimate knowledge of, experience and familiarity with, the unique business culture in Asia, are critical to business success – and that's where Perfisans shines.
Perfisans has demonstrated the strength of its relationships with strategically important OEMs in the region by virtue of the substantial business it has already secured. Some orders have come against leading competitors such as Intel, Broadcom, Realtek, VIA and Marvell.
One of those recent design wins was with Zhejiang Orient Fiber-sense Photonics Communication Company Limited (FSP). FSP will utilize Perfisans' ENA1001 gigabit Ethernet accelerator chip in its next generation of high performance, high efficiency network and 802.16 -based wireless broadband systems.
"FSP's selection of Perfisans' ENA1001 Gigabit Ethernet Accelerator chip represents another major validation of our technology and a significant step towards penetrating high-performance networking markets," said To-Hon Lam, Perfisans' President and CEO. "As one of China's largest telecommunications service and solution providers, FSP has substantial expertise and business relationships with major carriers and large enterprises.”
As further evidence of the strength of its presence in China, Perfisans has already partnered with Lestina International Ltd, who will market the Gigabit Ethernet Accelerator and its next-generation broadband Customer Premises Equipment (CPE) solution in the Chinese market. In addition, Perfisans' products are being utilized by Kelytech Corporation in the United States and eIDS Solutions of Asia.
From an investment standpoint, the key to finding opportunity is being able to buy a company when it is finally through the awkward “early development” stage and ready for that period of hyper adolescent growth. Since launching its first product in September 2004, Perfisans appears ready to roll.
PFNH is grossly undervalued compared to its peers. Trading at about $0.19 it is well bellow its 2 years high of $2.50. Smarter investors – including larger institutions – may well see it as an opportunity to start scooping up shares. In situations like this, early investors are often the ones who profit the most.
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