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We occasionally get informed about work that’s been years in the making that we knew nothing about, so it’s highly probable that there are various projects currently in play that similarly we as shareholders are currently completely ignorant of. Let’s call these unknown unknowns. We have known and RNS’d projects that we currently have no knowledge regarding their progress, for example project connect and project sunrise. Let’s call these unknown knowns. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwi40YHVlNr4AhUDSEEAHfMTDH8QFnoECAUQAQ&url=https%3A%2F%2Fwww.theglobaleconomics.com%2F2021%2F09%2F04%2Fairbus-project-connect%2F&usg=AOvVaw36RGaiMTjwT9TvDX6X4z2N There are contracts that we know about, but we’re missing the all important details, and have to settle for minimum contract values that might eventually be 300% - 500% larger when models are added and production lifetimes are extended. Let’s be generous and tentatively call these known knowns. In addition to all of the above our BOD may know a great deal about the company situation, but not everything by a long way, being surprised by the lack of competition being a reasonable example. Considering all of this, I am in awe but very grateful to everyone who is prepared to attempt monetary valuation, it’s difficult enough even before world events are added to the mix. I do have various and disparate ideas about how I see our immediate future, but would I be sufficiently brave to estimate break even day….no!
My tuppence on the excellent debate earlier is that we have taken on a lot of staff and have lined up offshore engineering firms to support SEE through the massive bump of work that the declared (and won, but not signed) will require.
This work is to customise, add new features (and verification and validation) that the OEMs request. This Non-Recurring Engineering work is paid for by the Tier1s /OEMs on completion of the various milestones. This work is profitable (but nothing like the ongoing profit though) but lumpy. Well with all of the new starts in 2023/2024/2025 we are hitting these now and they will keep coming in the next few years.
MrBB, well said. Shares are priced as forward discounting mechanisms ie. the share price represents the Net Present Valuation typically involving the next 10 years cash flows suitably discounted. Basic text book stuff.
Catalysts for rerating [bracketing the Macro out there]:
1 Fleet takes off - i.e. from ugly duckling to beautiful swan 2 NASDAQ listing timetable 3 Fovio momentum with bigger ticket values on the deals 4 Collins do a big deal to commercialise Aviation
Great & well thought out debate & base on contacts already won ,which in itself is conservative on the basis that it doesnt include additional RFQs which we are expected to win,which ,when announced, will increase our prospective revenues further. We are day 1 of FY23 & if Markets are supposed to value companies 18-24 months ahead we are now in the accounting periods zone which should see us profitable . Much to look forward to here despite dire markets & much uncertainty
One fly in the ointment, not all Mach-E's have DMS. I've got a Mach-E without any DMS, it's the basic model. I appreciate that this will change with legislation in 2023/24 and 2026, but the impact means that your figures may need revising down a tad until the mandatory legislation comes in and has an effect.
Totally understand you can take a more cautious approach. The SP is depressing us all. But feel more optimistic about bluecruise as i am sure the margins are much higher Terry, a good point i had totally forgotten about the extra features being requested Also there are upfront costs for feature development.
Discussing with Glandore it occurred to me by December we will have enough data to be sure. No more conjectures
I'm sure Cenkos have us down as making a profit in the fiscal year July23 to Jun24 - therefore, that would be announced in Aug/Sep 2024 Although perhaps in Aug23 SEE will forecast a profit for the following year (based on reducing the loss significantly during the fiscal year that has just started) so then II's will start piling in and the SP may start to get to the levels we all want it to.
You cannot divide like that. Revenues you see today are due to 4 project lines 1. Ford 2. Diamler 3. BMW 4. GM
Of the four only ford is a full chip solution for which price is higher. Did you take into account the volumes for chip vs non chip. I dont think SEE releases those figures. 14 dollars avg already tell you chip solution is probably close to 25
H1 Financial reoport - DMS revenue divided by increase in vehicle with DMS during the 6 months.
Looking at the wider picture SEE is running at a loss rate of AUD30m per annum.
To convert that to a profit (at say 60% net profit margin )requires extra revenue of AUD50m. (Changing the net profit margin obviously gives different revenue numbers) I cannot see that happening in the next 18 months.
Glandore, 16 aud, where did you get that from? Yes, F150 Lightning bluecruise uptake might be less, but not for MachE. 88 percent is very well what MachE uptake looks like. However one thing to consider for F150, as the demand is higher it allows Ford to push the higher end models better. Lets see how it pans out, by year end we will know if Ford increases the volumes and will have data for F150
Thanks for that Aaroon - great to have some numbers.
revenue per unit - 20-25 dollars per unit - in H1 the number was approx AUS$16 so we will need to see where that falls. BMW will have iDrive in all NEW models and Model Refreshes per the salesman. So a while before it is ubiquitous. Bluecruise (and Supercruise) only work on mapped highways in the US (and China ?) and was only offfered in the higher cost models of the F-150. Again I think it will be a while before it is reaching the penetration levels you suggest.
Not really disagreeing with your numbers (apart from revenue per unit) but I believe you are probably a year or two early.