The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I'm not a shareholder in AVCT but I did ride their coattails during the AIM Covid liquidity bubble in 2020/1.
A well respected EM fund manager acquaintance I discussed AVCT with in Oct 2020 suggested their l-t value was 30p - an outrageous suggestion at the high of the Cov19 AIM bubble. However, on the basis of his track record I heeded his his advice I sold out and locked in profits.
3 years later, his forecasts seem eerily prescient, with AVCT's SP down 75%.
My advice to Pis:
1) Challenge your investment thesis v seasoned fund managers.
2) Check out the track record of so called 'experts' ( Myles McNulty?).
3) Do your own research rather than relying on the crowd/chat rooms.
Ways to make money: AIM v NASDAQ? Debate and discuss!
Re Black Tulip - I guess it is due to a combination of Cov19 delaying project completion and ( possibly) financing issues. If you check out the Saracen Pro ( BRMNs - Piura) linked in page toy can construe the narrative. BTMNs Chala is a different kettle of fish- dependent on access to financing but if accessed (leasing facility?) could exceed Piura. BTMNs are 1 small scale artisanal mining outfit in Chile. No guarantee that they are going to unleash a tsunami of orders from the 4,000 mining cos with 1-2MW of demand should they shift from wet to dry fuel.
"Will drift much further and will either be back up over 10p in 3 months or will be under and sold for parts, IMO."
Thanks for your 'insights'. It either goes up or it goes down. Great insights.
5 months since the last (75KW) order from InterGroup Mining was announced on 24 Sept. Almost feels as though shareholders have been abandoned since the Oct £3.5m cash raise. In terms of PR, generating investor loyalty and confidence in the company, it's fair to say that the last 5 months have been an unmitigated disaster! What are the chances of VDTK turning things around?
I think it is quite telling that VDTK only has one institutional investor (Unicorn) who believes in them, 3.5 years after IPO'ing on AIM. That is not exactly a stunning endorsement of their track record and future strategy. They don't have a USP, are therefore vulnerable to price gouging by Asian competitors and nobody seems to have any clear idea about what Paragraf's future is or if and how VDTK will fit into the equation. At this point imo VDTK is a speculative punt rather than a fundamental investment. I hope it works out but I am not holding my breath.
Verditek is a conundrum. On the one hand it appears to be in the right place (renewables) with the right product (lightweight flex SPVs) at the right time (global shift to solar). On the other hand, it continues to disappoint on delivering sizable new contracts (1MW+). How much of this is due to Cov19, poor operational structure/sales team, inept management, lack of resources or weak balance sheet is unclear. However, the fact that VDTK hasn't been able to shift the 1MW of stock since the 'postponement' of the 1.5MW SAF ****stan order in mid December, is a concern. With cashburn of £1-1.5mn pa and estimated cash at end Feb of around £1.5m, VDTK appears to be in a race against time to generate orders before cash runs out and the begging bowl is passed around to investors for the umpteenth time. Having hitherto promised so much and delivered so little (thereby burning so many bridges with investors), the jury is out as to whether investors will be so generous at the next fund raise unless it comes at a huge discount and existing major shareholders' influence is massively diluted.
With no sign of the much vaunted Paragraf JDP update or any material new contracts from credit worthy customers in developed markets for nigh on 6 months together with a lack of trading update containing a strategic vision of what VDTK is trying to achieve, I have de-risked my holding in VDTK and am happy to sit on the sidelines to see whether VDTK can deliver on their potential or whether state subsidised Asian competitors will slash prices, crush margins and rain on VDTK's parade.
Patience is a virtue, but in a roaring small cap bull market, there is a huge opportunity cost to being the last man standing in VDTK! Major shareholder Paul Harrison's turbo charged vimeo presentation in June 2020 which contained a host of uber bullish forecasts ("we are gaining enormous traction very very quickly"/ "watch this space for near term early order news"/ "we are getting incredible interest") seems a distant memory. GLA.
It seems an eternity since the 'Breathless' Michael Walter's article on 30/6/20 which contained the following:
"New chief executive Rob Richards is absolutely confident he and his new sales team can generate substantial orders across a variety of industries, and quickly. In the weeks and months ahead, there could be a strong flow of encouraging news."
Almost 9 months later, follow on orders have been non existent as have any meaningful revenues. What went wrong and what are the chances of turning things around?
Ladders - you may have noticed that the VDTK twitter feed has gone curiously silent in the aftermath of a series of I'll advised/poorly worded tweets. ...I believe comms (tweets/LinkedIn feed) used to be farmed out to a 3rd party agency. I suspect it is now being reviewed so hopefully they will come up with a more coherent comms strategy that strikes a balance between releasing financially important updates in a timely fashion and keeping private investors in the loop about how the company is progressing with the CEO appearing on relevant investor social media outlets like Proactive/Investor meets company.
VDTK appear to have poached a UK sales rep (Leo Powell) from one of their lightweight flex SPV competitors ( Welsh based BIPVco). Appears to suggest that VDTK are shifting from a sales strategy of commission based 3rd party sales agents to full time in house sales staff. A small but important step in the right direction imo.
Make that 3 x 3m share late Buy trades totalling £575k. Could be an II accumulating. Either way a pretty significant vote of confidence.
Interesting that there were 2 late trades ( Buys) today totalling 6mn shares worth £350k. Pointless to speculate whether an RNS is on the way but you don't make that scale of purchase for sh#ts and grins!
The apparent reversal is more than welcome. First stop Oct's 8p CR price. Suspect the euphoria that greeted the SP rise last year will be tempered this time around by a healthy dose of scepticism! VDTK are still a long long way from generating 20MW of sales in 2021 ( base case scenario in the Seal Advisors report). Frankly any sizeable orders (0.5-1MW) would be welcome at this stage, with the proviso that the cash is lodged safely in VDTK's bank a/c this time around.
As far as I can make out, the bulk of Sunman's eArc modules have been fitted to roofs including the Australian Maritime Museum in Sydney (which proved something of a disaster due to probs with the inverters and efficiency levels that were less than claimed....). So far VDTK don't really seem to have focussed on roofing projects. They did have a tie up with MetroTile but this hasn't resulted in any sales.
Shi, founder of Suntech Power which grew to be the world’s largest producer of solar modules, said price concerns had already triggered a 40% increase in enquiries for Sunman’s innovative e-Arc modules which use a lightweight polymer composite material in place of glass.
The flexible modules are 70% lighter than a glass panel which allows the modules to be installed across existing rooftops and other structures that are not strong enough to support heavier glass panels.
SunMan has rolled out more than 50 MW of e-ARC modules globally with 3 MW installed in Australia, including a 813-module 235 kW array atop the Australian National Maritime Museum in Sydney.
“The e-Arc modules are a cost-effective alternative to traditional solar as they are flexible and can be bonded to rooftops or other building surfaces such as facades,” Shi said.
“There is huge potential for commercial and industrial building owners to reduce their costs and lower emissions by investing in e-Arc solar.”
The technology has already attracted the attention of the Clean Energy Finance Corporation (CEFC) which last year poured $7 million into Sunman to further develop the application of its e-ARC modules.*
* NB Sunman licensed eARC module technology from DAS who are now claiming they infringed their IP!
Interesting article in PV Magazine about Sunman, a competitor to VDTK. It claims they have sold 50MW of their eARC modules globally. Also they are reporting a 40% increase in demand for their eArc modules recently due to a glass shortage for traditional SPVs. So there is clearly v strong demand for lightweight flex panels. it begs the question what is Sunman doing right (Marketing? Pricing? Competent sales force?) that VDTK are doing wrong? Answers on a postcard please!
Sophie - It's an old link and relates to BTMN's Chala gold mine which they are planning to expand to 600tpd and order up to 1MW of panels from VDTK if they can arrange the financing ( the bulk of equipment at the site will be leased). This potential order is quite separate from the Piura gold mine ( privately financed via Hermione Capital) which placed the initial €200k/150kw order with VDTK in July. Once the Cov19 delayed project at Piura comes on stream at 50tpd capacity. BTMNs plan to expand capacity to over 300tpd and increase panel orders ( presumably from VDTK if they are satisfied with the initial shipments) up to 600kw.
Saseefeldt - you may be right. However, if you do some digging on social media ( LinkedIn etc) you may uncover the links.... Verditek tend not (probably at the Nomad's behest) to announce partnerships ( AF Global/Reliant Int'l etc) until they generate meaningful revenues.
I found the article about Dubai based Enerwhere particularly interesting as the CEO, (who is a LinkedIn contact of Rob Richards), specifically makes a comment about what appears to be a product v similar to VDTK's PowerMat "solution in a box" and also talks about sustainable renewable products for the off grid mining sector......
If Rob Richards is leveraging his O&G contacts to gain traction for VDTK in the Middle East, this is potentially a v positive move for VDTK because unlike customers in EM countries, I suspect that customers in the ME are going to have better credit ratings and actually be able to pay for VDTK's panels if they place orders!
"Renewable energy company Enerwhere is carrying out feasibility studies on wind capacity to support cement quarrying in Abu Dhabi. Based in Dubai, Enerwhere specialises in portable, easy to install solar hybrid systems for off-grid projects.It believes renewables can be used to help mining and quarrying industries in the UAE and West Africa to reduce their carbon presence. The company, which has floating solar photovoltaic panel systems installed off Zaya Nurai island in Abu Dhabi, is already using solar installations to power cement recycling processes at Al Dhafrah in Abu Dhabi. It is also assessing other renewable opportunities.
“We are looking at ways to make wind transportable in our business model and there are various ways to do it," chief executive Daniel Zywietz told The National.
"You can use smaller turbines, you can use kites, you can you can use things that fold up out of the box. We’re currently in the assessment phase.”
The feasibility study for the wind scheme, which could add about 1 megawatt of capacity to support site operator Al Dhafrah Recycling Industries along with other facilities, is likely to take in the region of six months.
Enerwhere, which paused some of its plans to expand to Oman, Saudi Arabia and Iraq because of mobility restrictions, has refocused its efforts on supporting infrastructure development in the UAE.
Enerwhere is offering affordable, renewable off-grid power at a time when the mining industry is coming under greater scrutiny from investors to meet environmental, social and governance goals, Mr Zywietz said.
“If you’re in mining right now and you’re publicly listed, then you’re dealing with funds that are telling you ‘Look, it’s sustainability, or you’re not going to see any money’,” said Mr Zywietz.
“So I think the big difference to the last commodity supercycle for us is that it’s now going to be much more sustainably powered,” he added.
Pessimism relates to the projected rate of cash burn, concerns that another CR could be on the cards at some point, that Cov19 will continue to delay deals being signed and that the 18 strong sales team working on commission isn't working and VDTK will need to hire an in house sales team to sell their panels. Optimism meanwhile is based on the belief that VDTK has a competitive product, is targetting sectors which are shifting from wet fuel (diesel) to dry solar in the oil&gas, mining, transport, telecom base stations) and VDTK is in multiple discussions in multiple geographies. VDTK is also 80% below its ATH and on a mkt cap of £14m it would only take one of two orders of 0.5-2MW to significantly rerate the SP. Each argument has merits. I still think a rerate*(*not to the ATH!) is on the cards in the next 2 months.
"Do I not like that" January 2021 - not a month that VDTK or the rest of us will remember particularly fondly with the SP down 52%. Surely things can't get any worse next month!