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@LLol -You need the positivity of Canaccord who are mopping up sold shares and happy to buy at 20p. I think they were responsible for 60p rise too last year. Sure collection of holders but they see something here. Now happily reducing their average. I think they may take on 15-20% here.
Hi Rogadar - the reason for my scepticism is that there have been umpteen false dawns with IQE over the years.
In this time, they've produced many forecasts suggesting imminent improvement to profit & sales, most of which have never materialised.
They have huge fixed costs and simply haven't been able to cover these since about 2019. They also declare "exceptional" items with alarming frequency (like just about every year).
All that said, I think a fair bit of their problem was Drew Nelson. And he's now relegated to the backbenches, despite his superficially posh-sounding job title.
I've a lot more time for Lemos, as he seems far more commercial & better connected (notably with Global Foundries). I don't for a minute believe he'll achieve their 5 year plan for 3 x revenue & 30% margin. But I do still think there's a chance he might make decent progress towards it. On a 1 year view, I can't see the figures improving much. In fact they may well get even worse. But in 3 years' time, things could look much improved (though with IQE there are never, ever any guarantees!)
Hope this helps.
Canaccord still buying. Auto trades all with same time scattered across trades today.
It doesn’t feel like a dead cat bounce then, like I said
Hay Lord… you seem to be sceptic about future of IQE, I find your post more than reasonable, but what are your reasons/knowledge behind your opinion. Looking forward to your answer.
All for banking some profits but I hope you've gone too early (I need 40p).
Momentum is certainly with us.
Let's hope this rise is on the back of deals bubbling in the background. Either we have a new customer or that a bidder wants to buy the capacity opportunity that IQE can provide and we're in the throws of stake building for a take over.
Good luck all.
That's me out thanks again iqe. To all on here -- good luck with your investment.
Canaccord are a wealth management/investment banking so wouldn't own stock, they are reporting what their clients have bought/sold.
But you can’t work that out with any degree of certainty IMHO.
So little point in speculating on it.
It's working out if this bump is because a seller is now done. Or is it because Canaccord just consider this a big buy and are mopping up stock. 10m shares is 1% of the stock. Maybe 13-14p was heavily discounting the stock.
Gotrader - what does it matter? One fund sells, another buys. Tells you very little IMHO.
So who was the stock bought from? Will we see a large trade go through? Or was this a fund selling in background were not aware of. There have been a lot of automated trades here so be interesting to see what pops up. Invesco still have at least 11.9% at last time of reporting. Or has another fund been selling for last few months.
Lemos’ latest add is encouraging - & no doubt responsible for much of the recent SP rise.
I suspect he’s accumulating on a minimum 1.5 - 2 year view, as I doubt the figures will start looking very pretty until at least then (assuming they ever pick up - never a given with IQE!)
If I didn’t already have an overweight holding, I’d have been be tempted when the price dipped below the mid teens. But as it is, I won’t be swayed unless there’s an opportunity to add below 12p. And even then, I’d want to a) understand why the price had fallen back again & b) be fairly confident this move was only temporary. Just been caught out too many times with this company….
Https://www.ii.co.uk/analysis-commentary/insider-big-bets-recovery-iqe-and-ftse-250-share-ii529846
Some of you might have seen above - nothing that revelatory.
I never know where line is drawn with inside info - but you'd hope the CEO does and he hasn't got £250k to burn!
Either way I'm sticking along for the ride and glad I didn't get panicked out couple of weeks ago.
My gut is Canaccord are still buying now. So many auto trades appearing as sells that are actually buys.
As expected from the auto buys last week canaccord up nearly 10m shares
It's not a straight competition Alessandro. Compound semicnoductors enable new use cases that require long product development lifecycles and have uncertainty over which will and which won't become popular. IQE has a broad range of products and a wide technology moat and so I'm confident over time it will be successful. Lack of profitability over the last few years can be put down to a large investment in capacity and two major technogies that didn't gain traction - laser array based depth sensing in Android phones and mm wave 5G. They either need to take off now or be replaced by other income streams.
Thanks Gotrader
I have looked at the annual report and the CEO sees revenue up 3x and 30% margins. It seem IQE has a technology mature to be marketed and by what I see in other reports/videos (yes, YouTube...), compound semiconductors, although expensive, have lots of applications and demand should pick up in future years. At the moment it seem compounds cannot compete with silicon based semiconductors, due to higher price and more complexity in manufacturing, which does not outweigh the better performance. I don't know when this will reverse. If I was a manufacturer of electronics requiring compound semiconductors, I would proactively look for compound manufacturers, but I cant see them scrambling for the technology. At least IQE seem to be chasing customers rather than having prospective customers queueing at the front door, with their order book that has shrunk slightly in recent times. If demand for compound semiconductor is about to explode, a forecast 3x revenue sounds very cautious, to the point of making it suspicious.
I am tempted to buy in but I am also tempted to wait future interims/FY reports and have evidences of sales volumes
They are forecast to lose around 25m for 2023. So any ebitda of 4m or so will not cover the 29m or so cost of sales.
Brokers forecast 112m revenue for year with about 25m loss which may not include one offs. With sales set to rise to 146.7m (-14.95M loss) 2024 and 163.53m (-11.21M loss) in 2025.
They are geared for large scale production now. In 2009 they were a much smaller operation with running costs of 16m or so compared to £29m now. This is why on 132m-160m they were able to generate profits of 16-20m. Now they would need revenue of 185m+ to make an actual profit.
The CEO believes he can bring in large orders with 30% margins which can turn around IQE. They have a Welsh site that is only using 10% of it's space. Production here could be increaed 10 fold. If they use all their sites could they be turning over closer to 400-500M? What they lack is orders and scale of economy.
What they got in 2023 was orders shrinking form 167m to about 112m. 112 is the estimate. Results suggested 10 or so % ahead of H1.
Judging by the CEO investment we can assume he still has confidence in this plan. If the orders were to stream in then future years revenue could be higher. Waiting for evidence of this.
IQE has not been profitable for the past 4 years, by the September update I can infer 2023 could be a profitable year (hopefully not on an adjusted basis only).
What has dented the ability to generate profits after being modestly profitable since 2009? How can I value the shares without knowing the projected earnings for the foreseeable future?
A November TU very unlikely now. I did wonder about that trade yesterday. Why wouldn't he buy at these prices if he bought at 20p.
January update could be an inflection point.
Very encouraging, a fair vote of confidence.
How's that then!
Alwaysone - no-one can ever tell that.
And anyone who thinks they can is kidding themselves.