XTD operates digital advertising screens on the Melbourne and Brisbane metro railway networks, which it leases from the rail operators in return for a share of advertising revenue. XTD subcontracts the provision of advertising content to APN Outdoor, so that XTD ends up with about half the advertising revenue from its screens.
There is a risk that XTD loses its existing concessions when they come up for renewal in 2021 and 2022, but the company is countering this with attempts to expand into metro rail networks throughout Asia and the United States. To that end, the recent announcement of a trial of the company’s system on the New Delhi metro rail network is a positive sign. If it proves successful, it could lead to substantial increase in XTD’s revenues and profits.
The stock remains highly speculative and, while we’ve expanded our coverage of small cap stocks, XTD’s $22m market capitalisation makes it far too small for us to cover, as members following our recommendations will likely have an undue influence on its share price. We’ll keep monitoring the stock but, for now, we’re CEASING COVERAGE.