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Eadwig,
Fully agree, I mean't to start my last post with 'As Eadwig states', as we appear to be thinking along similar lines.
I think AFC have a good strategy for cost management going forward. They are not about to set up a new manufacturing facility just for themselves as their strategy is to use other established manufacturers to make their products. Denora are established on the electrodes and Rolec will have key relationships with manufacturers. Therefore they only need to manage their operating costs for now which they have done remarkably well with the placing at 20p. There won’t be another placement for a while and so I’m looking forward to further rises over the next 2 months as we know for sure there are planned events. I think PIs will gain significantly long term if they hold their nerve over the next couple of weeks. It’s normal to bounce around the placement price or just below until it’s out of the way so by next week it will be released again. There are always those who bring a doubt with their opinions so I just recommend people check the facts, the maturity of the technology, the huge market that is ripe for this product, the strategic relationships in place with world leading companies Rolec and Denora, board members bought in, a reinvigorated marketing team, investor videos hinting strongly that contracts are just around the corner (AB hinted one this year). This is AIM, it’s bumpy but it’s the chance to make very big, and this company is probably better placed than any to make it. So if you invest in AIM there is no better option than AFC
Rooky, "My point is that I feel the AFC sales team will look after the £1,000 pocket change clients, with De-Nora dealing with any of the big boy £1,000,000 plus clients."
Presumably with the recently appointed director with power plant sales experience and possibly A, Bond. present also.
My reason for thinking AFC are still looking at leasing plant to customers is that somewhere on the new web site or one of the recent RNSs there was an expression of intent/mission statement which spoke about plant ownership.
I'm guessing there probably will be a mix of approaches depending on size of sale and product type also. All will become clearer over the next 20 days or less.
Also, I've spoken about cost of sales, but when cash has been raised over the year the announcements have always mentioned 'supply chain' costs rather than the sort of sales team costs and after-service I've been talking about. So, its all just speculation at the moment and I'm unsure what to guess at on the supply side as I tend to assume that partners like De Nora will be shouldering most of the up front costs there.
Time will tell. Certainly exciting times, especially if the share price breaks through the barrier set @20p by the recent placement. I think it will at some point, with that price becoming a bottom 'support' as the chartists say ... but who can tell when it comes to markets really? Just my best guess at the moment, obviously.
Morning Eadwig. We are not clear what the business model will be now. The old approach, where AFC would become a power company selling power, was not always the one used. They would have used it in the Chang Shin MoU, had that progressed, but sold fuel cells to Daniel, under their MoU.
More recently a different approach was suggested for Southern where the stacks would have been leased to them. No idea what will happen with vehicle charging.
My opinion for what its worth.
I was involved in sales many years ago.
My remit was for small to medium volume sales, but whereas I was occasionally initially involved with potentially large scale volume customers, I then passed as a lead, that customer to another sales team, not just because those sales people has the authority to negotiate far higher volume deals, but because they had the means/connections to negotiate with those at the top of these companies, winning and dinning as it was called, and no matter what some people think in this modern compliance, anti-bribery/inducement world still happens.
My point is that I feel the AFC sales team will look after the £1,000 pocket change clients, with De-Nora dealing with any of the big boy £1,000,000 plus clients.
red_hornet,
it depends on the business model. There has always been a suggestion that AFC will continue to own units and therefore be responsible for maintenance and upgrades under a lease arrangement. This would require an after-sales team for support ... although I take your point about De Nora, some of that could be done by De Nora staff, who are defnitely better placed world-wide.
It is not an insignificant part of a successful marketing-mix that will be required, especilly with that particular business model. It will cost to put in place people and training whatever the model is to deal with installation and any on-site problems.
Thanks Itsallbull - always helps if you can see the link :)
My point was......As De Nora has a number of plants across key AFC markets, I doubt AFC are overly worried about having a sales team. I suspect De Nora can drum up enough business to keep them going
www.crainscleveland.com/manufacturing/de-nora-tech-growing-new-home-mentor
De Nora Tech (subsidiary company) moved to their new plant in Ohio in September, but are already looking to expand it. This comment was quite interesting.......De Nora Tech is always looking for new markets. Currently, Schafer said, it's targeting large-scale battery storage for the energy sector as a potential place to grow.
https://www.crainscleveland.com/manufacturing/de-nora-tech-growing-new-home-mentor
Yes I have seen lots of 10 foot containers. Mostly used by roadside work gangs for stores and welfare.
There is such a thing as a ten foot container, coincidentally I drove past a new road works site in Essex this week and they had a few containers there and due to the discussion board I looked at the varying sizes and I seen a very small one which looked around ten ft to me. I've never seen one before but they do exist.
Eadwig ....I put this link out when you first questioned the 10'container... http://www.southcoastcontainers.com/buy_10ft_container/
Augustus: "Hi Eadwig, just for your info, Norway already have 2 hybrid cruise ships operating"
Well, two more ferries coming up, one working off liquid hydrogen one off compressed hydrogen while they work out which is most cost effective down the line. I think they should speak to AFC before committing to the build (first one already underway, actually). Will be interesting to see the new hydrogen producing facilities, presumably using Norway nat. gas. and how environmentally friendly they can make them.
Yachtmaster:"Eadwig, if you listen to the recent interview by AB he talks about shipping. So AFC have talked about shipping, trains, etc."
Ah, that's interesting, I haven't seen the interview, I'll search it out. Trains are another obvious one where the size of plant wont be an issue...
The products on the web site are described as fitting in a 40', 20' and 10' container. I've heard of the first two, both standard sizes, but never a 10' container. Being a yacht (shipping?) person perhaps you can confirm such a thing exists and it isn't a typo?
Eadwig, if you listen to the recent interview by AB he talks about shipping. So AFC have talked about shipping, trains, etc.
Hi Eadwig, just for your info, Norway already have 2 hybrid cruise ships operating: https://en.m.wikipedia.org/wiki/MS_Roald_Amundsen
This company are one of the leaders in hydrogen production here in Norway: https://nelhydrogen.com/ They already have some fuelling stations and hydrogen trucks are ordered by some of the larger Norwegian companies driving the length of the country every day. Nel has recently had a bit of a hit as Nikola - a company making semi trucks have claimed they can make long distance trucks using new battery technology, personally I still see a combination of hydrogen and battery as the answer in this market, however I won't clutter the afc forum with irrelavent information! I do agree the shipping sector is very interesting.
"I won't be taking profit on any of mine. If this company does what it says today's SP will be a fraction of that in 2 years"
Nothing wrong with that and I hope it works out for you. Each to their own, we all have different investment strategies and, most importantly, different motivations and investment horizons.
I have some doubts in some areas, I'd rather take some large profits now and reassess later, as I said.
I don't know if it has been mentioned here but shipping is an area I've never heard AFC mention. The industry is facing tough new regulations around the world as tankers and container ships etc use the dirtiest diesel there is. Now some can't get into certain ports and others will be banned at a later date. re-fitting is often not worth it, so some ships are being scrapped earlier than they otherwise would have been.
If anyone reads the maritime trade press you can't have missed the interest in hydrogen fuel cells, backed by battery power, for use in such craft - ferries too. Norway already working on a hydrogen driven ferry type with plans to produce hydrogen within the country for same. Things are going to move fast.
It looks like a huge market in more ways than one. One of the doubts I have is the size of the fuel cell products that AFc has on its new web site. But a 40' container sized power plant wont be any sort of problem on a container ship carrying hundreds of the things.
I won't be taking profit on any of mine. If this company does what it says today's SP will be a fraction of that in 2 years. Alkamem alone could do it. An innovative and superior product in a one billion dollar (and growing) market place with lots of further additional applications. If AFC got 10% of that market and is licensing the technology that will be significant. Let's say a profit of 20% of turnover (likely to be far higher) that's £20m (Switched to pounds for ease) a year. On a very unremarkable PE of 20 for a growth tech company that gives a MCap and £400m. That's almost a pound a share just for Alkamem on these conservative figures and with a growing market.
Now start to think about the fuel cells themselves. Especially the S version.
This is a potential billion pound company in the next few years.
I would not have said that four weeks ago.
There was bound to be some profit taking at some point. People have waited so long who can blame them? ... and then a bit of panic as the price dropped more sharply when people decided to take some profit while it was still there, just in case.
I've taken 100%, 300% and 450% myself but have confidently held on to at least half of my older holding and, as I said, added on this recent drop - although obviously not expecting such returns from the recent buys. I'm not saying I wont sell out on or just after 6th December, but that day is going to be the biggest catalyst we've ever seen in this stock, I predict.
I'm just hopeful that the cash raise was taking an unexpected opportunity as much as the fact they have actually run out of cash to enable fulfilling orders... especially I'm hopeful that the nearly £2m raised earlier in the year plus this latest £0.5m is enough without them having to begin to draw on the £4m loan facility (they still have other product launches to fund).
Of course I can't know the situation, but that is how I read it, more sales/interest than expected requiring more money to fund before revenues start coming in. Its possible they have overspent the budget because they got the costing wrong, but having been on a shoestring for 10 years I find that a hard scenario to credit.
My plan is to take profits after 6th December, probably retaining a small percentage of my holding, then reassess once we have some firm idea of costs, customers, revenues and profits. Then its a whole new ball game... at last.
Spot on !
Eadwig, good summing up of the current situation.
Probably the traders diving out causing the dip as much as anything...
I'm amazed how many people here are troubled by a pro-active move to make a small cash raise to fund the supply of the new E.V. charging product. "To fulfill orders" is the key phrase. Plus, didn't anyone else notice the shareholder day is also intended to have 'partners and customers' attending also?
No one seems to realise that this cash raise indicates, to me at least, that they have had more interest than expected as they already raised the cash they thought they needed earlier in the year @3p and @4.8p which cost us all a lot more dilution than this minor placement.
Its called cash flow - but this placement was a windfall given where the price had been a week before. I predict initial sales will be announced at the demo or soon thereafter and they will have exceeded AFC's expectations.
I suggest people re-read the RNS and make your own minds up, but I've backed my analysis to be correct by buying more ... how many of us have been waiting and for how long for truly commercial contracts? Well, hang on to your hats, I believe they are here. and ready to announce. I already sold tranches for large profits, but more than happy to use this pullback to reload.
I would just point out that we still don't know anything about costs, revenues, number of sales, time for delivery and installation etc etc not to mention the business model, so valuing the company is till exceedingly difficult but that is going to come down the road, after it dawns on people that this is actually a viable and commercial company at last. D.Y.O.R. but I'm guessing that the valuation is already looking significantly over @20p, given the price paid in the cash raise, perhaps a long way over.