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I assume that the US deal is the delayed beyond ethernity control but still in active discussion. Active discussion to me means that they are still interested or haven't said that they are not.
The Q2 expected work is something different. Not fpga smartNIC acceleration linked to edge or 5G but really their old day job. These are bespoke work. Although the Aviation solution maybe transferable and marketable if Ethernity actually own the work. I suspect that the 5G wind dropped temporarily maybe due to the pandemic or MWC or something else. Ethernity clearly have multiple avenues.
Also this is the optimistic me talking but I think if the US deal can be closed by Q2 will be a potential boom boom.
Geographically, the US is expected to lead global investment in 5G over the coming 12 months, with 48% of enterprises planning to invest over the period, compared with 43% in the Asia-Pacific region and 38% in Europe.
https://www.capacitymedia.com/articles/3824982/5g-providers-need-to-reinvent-themselves-
Yes It is certainly causing a huge amount of disruption. I believe China in its own inimitable way will probably be the first to get it under control , or perhaps refuse to allow the virus to get in the way of progress! You wonder if certain sells are triggered under certain market conditions . Who knows not me. Still very happy with ENETs future.
Possible delay to China 5g deployment due to corona. Obviously Ethernity wouldn't be the only company to be hit which is why it's so important to throw everything at this virus:
https://ovum.informa.com/resources/product-content/coronavirus-could-impact-5g-deployment-and-standard-schedule-spt002-000304#.Xla4f5KhTBo.linkedin
I guess some people perceive a couple of months with little or no news and a write down of R&D costs creating a headline increased loss. I don't see much in the update that we didn't know or ought to of known. We do know that large regional solution providers are working with Ethernity and Ethernity will be involved in the China 5G deployment of sure. We also know that they are working on a aviation specific fpga solution. This will have appeal we'll beyond their current 2018 contract. I see no reason to sell, I wonder how many are waiting on their ISA allowance.
For me it's bang, bust or boredom. I don't think that they are wrong and I don't think that the large scale players associating with Ethernity are wrong. Question is will the market be huge, super huge or absolutely super huge.
Numbers are up in the air and we don't know unit costs. However I don't think that David would be doing this for nothing.
Still here and hopeful of some big contract news soon
Cash flow positive forecast pushed out by 6 months not unexpected .
We will have to live with MMs moving the SP up and down on tiny volumes like today.
The risk/reward is clear to me ....get the deals done over the next 6/12months and bonanza or company will be bought by one of the big players for its technology.
Ignore daily price movements as this is a medium term play.
I view it as a possible 5x times return on my investment or a 50% loss in the worst case scenario.
Patience is the key imho.
@Dallo, youve been pretty quiet, would be good to get your take being one of the largest retail investors that I am aware of, and new to this stock also?
An honest and to the point trading update - thankyou David! I view this as generally positive with the negatives being largely timing/delay related as opposed to things falling out of bed. Some really good stuff about conversations with various parties which, in my opinion, if half of those come to fruition over the coming couple of years, this could become a very interesting company indeed. The expectation of positive cashflow is now the end of H1 2021 as opposed to H2 2020 and so may only be a 6 month shift. All in all, IMO, a 'managing expectations' update which I would think includes some slack for things beyond the company's control, but a generally positive one. What we will probably see over the coming days is the impatient offloading but it is what it is. I initially thought of this as a 2-3 year hold and that hasn't really changed. GLA.
Q2 they said.
I'm hoping we can follow up yesterday's trading update with some contract news / initial payment over the next few months.
I would think that any delay in positive cash and the pace of pioneer deployment was largely expected and in the price.
I envisage that we'll see the rest of the world following China in method. Despite some isolated deployments in South Korea and others China will be the benchmark for method. With Chinese OEMs looking to Ethernity to provide the fpga, nic and software for them to build their product on they will become a industry standard. Ethernity will be able to replicate globally very quickly as the next generation wave radiates from China.
This will be a very large business indeed with very low overheads producing a lot of profit. Yes that maybe a year or three away but as we have seen before hype and attention drawn to sectors way before any real value arrives. That's when tough decisions are made.
Omg two news pieces in one day!! Bring it on
Good to see that they are working with several Chinese OEMs to embed the ACE-NIC100 into their solutions. This will certainly pay royalty over many years and produce the kind of reliable income that will allow for early dividend payments to shareholders.
Today's update confirms that the silence was about delays as we guessed. It confirms that Ethernity are still very much in the centre of the next generation requirements.
Ethernity are well placed in China working with Chinese OEMs so will catch the first movers. This will demonstrate to Europe, US and others that are way behind that Ethernity have the means to deliver solutions. The rollout, deployment and mass production guesses were way out and really half the world should have these solutions in place already. Largely this is because many approached 5G as a faster 4.5G.
Ethernity are much more than 5G but this is the driving topic at the moment.
Shop from home at lightning fast speeds I might add lol
Corona is really rocking the boat today , however I was reading how China is going full on ahead with 5G deployment so that people will still be able to shop from home !! Crazy ol world .
I’m guessing not Brighton beach then lol
*set up resultant = set of results! Got screen glare..
Skid I was also interested in that R&D capitalisation policy comment. So presumably they have designed some kit that they don't think will be utilised so will shorten the amortisation period? I guess that's one explanation.. just depends the amount they are talking about - could well be a small hit to the P&L but that's tech companies for you.. Can probably find out a vague number from the last set up resultant (but I can't be bothered at the mo as I'm at the beach!)
01234 totally agree I think they realise their communication has been terrible and it's certainly improved in the last weeks with the anncouement of the PR partnership.
I think they must have been reading this board and saw the main issue everyone had was communication to investors :)
Looks like the pr office are pulling their thumbs out too!
5g is rolling out this year. Enet have ‘class leading‘ solutions to enable it to happen. Thumbs definitely up
Well said. At least unlike other aim companies they have decent balance sheet with cash.
The note on capitalisation / amortization a clear warning for a p&l hit coming soon.
Got to admit I see this as much negative as I do positive. another big delay on cash positive deadline, no real forecast on contract revenue. contracts delayed and everything now moved to 2021, even seeing income from fibrehome.
And this statment -
"The Company continues to experience an increase in engagement with OEMs, system integrators and operators interested in Ethernity's solutions"
That all well and good saying "increase in engagment" but it's fluff and doesnt mean sh*t, its not tangible at all.
Now before I get flamed, the positive. I agree with you all plenty of oppotunity coming, plenry of cntracts talks (but still not finalised), good 20% growth on sales. Great news they are also focussed on 5G and have a partner solution with a large billion market cap company and in general sound like lots to come in 2021 that could shoot this stock to the sky and don't disagree in a target of 200mil+ marketin cap.
But I am not sure we will see much happen to the SP this year and with these delays and once again lack of contracts and forecasted revenue only the patient who are will to keep their money sitting here another year might see it pay off. It's a chance for long term investor to get now and hopefully not see further delays in 2021.
I think that it's obvious what is about to happen and everything else is quite volatile so this may have some safehaven appeal. Really whether it goes to £8,£10 or £12 in the next couple of years is irrelevant.