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I think its abundantly clear from the PH vimeo interview (to an Australuan investment outlet) and RR's comments in the 24 Sep RNS which accompanied the Intergroup Mining order ("Australia represents an important new territory for the company") that Oz will become a key strategic mkt for VDTK. Not only is the Australian Gvt offering huge tax incentives to domestic mining companies to shift from wet to dry fuel solutions but it is also clear that the Australian Gvt is not inclined to let the domestic flex SPV mkt be flooded with PRC imports. Following the well publicised legal spat between Sunworld and Austrian flex SPV producer DAS ( Sunworld infringed DAS IP in their 'eArche' flex SPVs and are no longer a DAS licensee) it seems that the Australian Gvt is encouraging companies to establish manufacturing facilities in Australia and contribute to the domestic green economy. Needless to say Sunworld is unlikely to be invited to the Australian solar party!
50 t/pd increasing to 300t/pd
Yes VDTK's flex SPVs aren't unique and there is competition ( Solbian, DAS, etc) which is well documented. The key is the installed capacity ( DAS 55MW, Solbian 15MW?, VDTK 55MW+) v latent demand ( artisanal mining 4-8GW, O&G 2GW, transport 100MW, telecommunication masts, solar car ports etc etc) Flex SPV demand far outstrips current supply and the fact that VDTK can shift from say PERC to higher efficiency n-type IBC cells is an advantage at this stage of the mkt development. Not having a USP in the next 2-3 years isn't a big deal because end mkt demand is exploding and VDTK can target high margin niche mkts where they have a competitive edge.
Graphene integrated SPVs will likely become a game changer. Efficiency levels are potentially going to be in the 30-35% range and Perovskite enabled cells aren't likely to be able to compete ( perovskite has durability issues, higher capital costs and producers like Oxford PV probably aren't going to be able to offer customers extended warranties on a par with VDTK) Interestingly Swift Solar in the US which is also pushing flex Perovskite cells, is targetting the drone mkt where short product life cycles mean they won't need to offer extended (5yr+) warranties.
So when will GISPVs be commercialised? That is the proverbial $64m question. As yet we don't know but hopefully we'll get an update in the coming weeks. If the PH interview is to be believed then commercialisation could be a lot sooner than the market expects and it would undoubtedly give VDTK a USP which could unlock new mkts.( lap top PCs, EVs etc)
A final point - worth having a chat with the few clients whom VDTK have signed up like Black Tulip Minerals in Peru. They cite the fact that there were no competitive tenders from other players when they were looking to move to renewable solar solutions for their energy needs and shifting to VDTK's flex SPVs was a 'no brainer' in terms of diesel cost savings. VDTK's product should ship in Dec/Jan so it will be interesting to get BTMN's feedback once they are up and running at the Piura site in Peru. BTMN's Initial capacity is running at 50 b/pd and they have indicated that further orders will be placed with VDTK as they scale capacity to 300 b/pd in 2021. Hopefully they will pave the way for other mining companies to shift from wet to dry fuel solutions and purchase VDTK's SPVs.
With a new product which clients in key target verticals ( mining, oil & gas, transport) are unfamiliar with, it takes time to seed and educate the market. I suspect trials (1-3 mnths?) need to be completed before client BODs can be convinced of the compelling economic and environmental benefits of shifting from wet (diesel) to dry solutions in the shape of VDTK's powermat lightweight flex SPVs. Frustrating but such is the nature of moving a business from 'proof of concept to full commercialisation. Patience required. Rome wasn't built in a day.
3.5 years on from the IPO in Aug 2017 investors have the opportunity to buy VDTK shares at pretty near the original 9p IPO price despite all the progress that has been made in the mean time: proof of concept - IEC certification - establishment of 55MW production facility at Lainate - appointment of experienced commercially focussed CEO - establishment of global 18 strong commission driven salesforce - receipt of first contracts in mining, oil&gas and marine sectors - continued progress on commercialisation of graphene integrated SPVs via Paragraf JDP- explosion in demand for flex SPVs in new mkts as Gvts increase incentives to encourage shift to renewable energy - prospect of profitability in 2021. All for 9p/£28m mkt cap as was the case 3.5 years ago. Finally the stars and the moon appear to be aligning for VDTK - right product in the right place at the right time with the right strategy and the right management to exploit the huge market opportunity and deliver shareholder value.
I believe that the research note errs on the side of caution in terms of capacity utilisation and expansion forecasts, revenue estimates and consideration of the timescale for GISPV commercialisation.
Available via the Vox markets website.
I should add that the report is corporate marketing that has been paid for by VDTK rather than an independent financial report but it has a wealth of interesting detail and is definitely worth a read.
MUST READ Very positive and comprehensive research note out on VDTK today from Seal Advisors., a 3rd party independent research house.
https://www.**********.co.uk/media/5f8583b4243d7b001b3e03c2/?context=/listings/LON/VDTK/
Some really interesting developments taking place in the EV market which flex graphene integrated SPVs could unlock. Worth keeping an eye on this space imo.
https://youtu.be/x7qNGRZn_n0
Great comment from the Deputy Director of for the Dept of International Trade (DIOT) who was at the EvRiderz MOU signing today: "Thank you very much for inviting me to witness today's MOU signing. This is such a great project and I'm so glad you've chosen Bangkok as your first overseas market. With the end of the rainy season fast approaching and the likely increase in PM 2.5 pollution this is the type or e-mobility solution Bangkok and other large cities desperately need." Huge opportunity for VDTK in so many other congested urban environments.
Today's WH Ireland research note estimates that the capacity at Lainate is in fact 82MW not 55MW. They compute this as follows: 15 panels ph x 3 shifts pd = 630 p/d. 420W per panel x 365 x 85% (15% down time) = 82MW pa. The shift from PERC to n-type cells will also help boost capacity. This is significantly higher than previous estimates of 55MW max capacity at Lainate.
16 page research note out this morning from WH Ireland which makes some important points regarding capacity potential at Lainate and earnings scenarios in 2021, has lifted the SP and allayed some investor concerns about competitiveness, potential order pipeline and OpFCF.
Could a small cap specialist institutional investor finally be taking a position I wonder.....
Famous last words, but I sense that sentiment is turning on this one.....
BM2 I have crunched the numbers on 3 scenarios for potential earnings/margins in 2025:
1) Capacity remains at current levels (70MW factoring in shift from PERC to n-type cells) and VDTK remain a niche high margin producer of flex panels
2) Capacity expansion to 500MW over the next 5 years in strategic locations with ASPs and prices falling 50% but margins remaining at 40-50%
3) Scenario 2 + all production shifts to Graphene & VDTK receive a graphene licensing royalty stream.
The SP upside potential (using a 10x EV/Op multiple on 2025 earnings) is (needless to say!) considerable under all 3 scenarios from the current mkt cap of £25m!!!! I am not posting those estimates on this BB as it will inevitably be deemed "rampy". Now we now just need RR to deliver the goods.
Agreed. It's been 8 weeks since the last large order was announced at SAF Pakistan on Aug 6 although smaller orders have come through since then. It does seems like an awfully long time ago that the SP was at 18p! However, with 18 sales people ( actually 19 inc Rob) each working on potential orders of 100MW ( aggregate 2GW) there has to be a fairly good chance that a number come good over the next 3-6 months. My only concern is that some companies may make a small initial order of say 250KW and trial the panels first, before committing to larger orders (1-2MW) which carry up front paymentd. That would create a timing issue, with large orders being delayed 3-6 months. So provided we see a succession of orders (250KW -2MW) over the next 3-6 months, I would be happy with the progress VDTK and Rob Richards are making. Under promise and over deliver is a good policy imo.
I get the feeling that there are a lot of moving parts which are in flux and they can't really comment on: 1) IM Efficiency - paid trials still ongoing and they don't want to compromise the outcome. 2) Capacity expansion plans - ongoing and partially dependant on the SP so can't comment. 3) Large orders from the mining sector - still being negotiated so can't comment. 4) FCF targets - dependent on orders being confirmed so can't comment. I suspect there is a massive amount going on behind the scenes but they won't release an RNS or comment on ongoing negotiations until material contracts are signed. A bit frustrating but being 'whiter than white' in the current environment is a sensible strategy imo. Silence doesn't mean that significant progress isn't being made behind the scenes.
I think it's only worth VDTK updating the market with an RNS when there is something to substantive to report. Critics will pounce on anything less than confirmed orders.
Re: Am I on the Verditek group on Twitter? Yes!