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Https://smarteye.se/investors/press-releases/press-detail/?slug=smart-eye-carries-out-new-issue-of-shares-through-set-off-of-receivables-1
Affectiva must be unhappy
No point altering the SP target in view of the current share price!
Cenkos only have to lower the steep disc rate it is using on historic estimates of cash flows to get a higher SP target - but the stock market being turned off it will take a view more jolts for the patient to wake up from its coma.
Once the SP starts to move up, Cenkos will reduce the disc rate pretty quick i.e. up their SP target
Reading the Update, makes their claims of market leadership look doubtful. Is there any growth in Auto once you strip out NRE revenues. I note the recent departure at short notice of the CFO
From SmartEye Q1 Update:
Automotive
We are still in the starting blocks for several of the large platform SOP:s with many of the world’s largest car OEMs. In several cases the production has started but isn’t ramping as fast as the original production plan schedules. Sometimes it’s because of components and sometimes because of general car software architectural issues. We are carrying on with the development work and the organic revenue increase of 20% is mostly coming from NRE, development services. Another source is that the fleet and aftermarket product has started to sell albeit at low levels. We are very positive in our outlook that our customers will ramp up production in the coming quarters and are expecting growth at higher levels than the current 20%.
Strong aftermarket KPIs
"... pent up demand for units. This should enable {fleet} to at least meet if not notably exceed our expectations"
177% YoY growth in Fovio units fitted.
Compare & contrast SEYE auto revenues in current US$:
DMS FY 2020 3.97M
DMS FY 2021 4.55M
DMS FY 2022 4.35M
DMS FY 2023 10.15M Estimate
Matml74, good read. Agree in general. On timing of a rerate, imo, though this depends on sufficient achievements by SEE to make plain to the market that this is going to happen and at scale. In particular, imo, Guardian can go from limping curio to aggressive uptake this CY - in which case we are off to the races - and notwithstanding disc rates [after all the effective disc rate for SEE is currently in the high teens]
RNS. Ive buys more.
Is it not concerning that some of our FD have been buying consistently over the past few months?
bb & seize - I'm sure you are right. But easy to imagine in current times other large holders coming under stress from their other holdings & being forced sellers here. Redemptions also can cause a steady drip of sellers. In circs, good sign that LO adding to their already big holding
Seize - I agree. My hunch is Griffiths. He has presumably been pretty much wiped out on his almost 5% of WAND. At suspension that was worth over £40m. I read he was on margin call. Then I came across his sale of one third of his holding in XSG at a [imo] distressed price.
DR if you imagine it will take another 10 years then you are joking??
This will either happen for SEE over the next 3 years - or not. i.e. it will be absolutely clear during this period how big or not this will max out at.
PIs are mugs. They can only talk about the share price - and in a meaningless way. Just read this discussion board.
I think the bear case on here is nonsense. I have a bear case scenario and valuation - but I can't discern any decent attempt to make a proper bear case. Ditto the bull case. imo, I don't think PIs get it at all.
The remarkable inability to analyse SEYE's accounts means you are all sh*tting in your pants. You are all good at panic attacks - but hopeless at discerning the competitive landscape
bb, I continue!!
My own view on Fovio is somewhere in between in that I accept the possibility of commodification in which case higher capex approach of SEE = reduced ROCE = reduced NPV. If push comes to shove though, I am a bull because I think Magna 's mirror could be a category killer. Magna clearly think so. Such an outcome would sustain SEE's pricing power imo. I think Colin is right because a lot of that failed capex on level 5 will pivot to making level 3 work as a thing in itself.
My own valuation on Fovio on bear case is say 10p. The bull case is 25p+ [depends on disc rate i.e. general stock market sentiment / interest rates]
It is on Fleet where I get the very high valuation. If I adopt a bear valuation I get a value of 0p for Fleet [indeed minus valuation weighing on Fovio value in share price]. My bull case begins at 75p on what I consider to be highly achievable sales beginning with G3.
I think G3 has stunning potential. The telematics market is big and growing. Geotab have 3m systems fitted to vehicles. MBY are also big players. G3 addresses a lot of challenges that the current kit has. G3 is cheaper, integrates easier with other systems, is faster to fit, addresses a market which now exists and is growing fast, has effective market access and has been designed to scale. Shell contracts x 25 = 1m sales. Doors open once biggies like Shell buy in. Happened with CAT before. I emphasise the Learning Curve. SEE has been on it for 8 years. My bull case is that they will get Fleet big and do it fast. All the failures of the last 8 years were also learning lessons. They won out of 100 systems Shell evaluated. Think on't!
PG differs from Cenkos. Cenkos assume continuing pricing power.
The answer to this depends upon 2 different views of how OEM develops. Bear view: commodification i.e. OEMs utilise DMS just to conform to legal regs - and no more. Bull view: Level 3 puts the driver's awareness at the centre of safety systems inc HUDs, gaze analysis etc etc i.e. added features and value. SEE are trying to cover all bases. Colin Barnden is clearly focused on the bull view [supplemented by his analysis that level 3 is where we will be for a long time and level 5 is a distant & expensive prospect with complex liability issues]
Agree bb
But note also Panmure Gordon assume a similar progressive commodification of Fovio - and a smaller mkt share as well based on a reluctance to quote on price competitive contracts. PG also assume failure of Fleet to scale with G3. So PG represent the bear case at 14.6p [imo]
Boonboon, Sorry!!
By the way, I put these numbers up because SEYE really are the other half of the market. Cipia is at present small fry
boonboon
you are wrong. SEYE is flattered by having a FY which ends 6 mnths after SEE's. Yet their numbers are staggeringly lousy
So if SEYE are running away with the market, why are their turnover numbers so much lower than SEE's?
Why have their DMS numbers been flat for 3 years???
A review of SmartEye's Accounts:
I have used current rate of SEK 10.35 to US$
Revenue US$
DMS FY 2020 3.97M
DMS FY 2021 4.55M
DMS FY 2022 4.35M
DMS FY 2023 10.15M Estimate
Fleet FY 2020 0.00M
Fleet FY 2021 0.00M
Fleet FY 2022 0.49M
Fleet FY 2023 2.71M Estimate
Research FY 2020 3.97M
Research FY 2021 4.55M
Research FY 2022 16.43M [Organic 5.28M / Acquisitions: 11.15]
Research FY 2023 18.46M Estimate
By comparison, SEE:
OEM FY 2021 8.5M
OEM FY 2022 8.9M
OEM FY 2023 25.1M Estimate
Aftermarket FY 2021 24.3M
Aftermarket FY 2022 26.7M
Aftermarket FY 2023 27.3M Estimate
SEYE's acquisitions of Affectiva & of iMotions were written down by US$10.74m.
I didn't find any clear narrative about the activities of the Acquisitions - which account for over 50% of turnover in FY22. There is some narrative about utilising Affectiva to enhance the interior sensing product. If Affectiva is a world leader in its research field then it has a surprisingly small turnover.
Generally, SEYE is focusing on price competitiveness and selling just the software component. Its Fleet product AIS lacks the Guardian type monitoring / reporting service [and appears to lack a haptic device].
The analysis by Redeye lacks any mention of the new Magna product which might very well upend the market. Redeye only mention Qualcomm and appear to think SEE are reliant upon QC.
SEYE have had no funding deals like the Magna investments in SEE. They have instead used a highly dilutive rights issue atr a big discount for funding. The write downs on the 2 Acquisitions suggests wasteful use of precious cash / shares [largely funded by shares issues]
"The basis for this project was a scientific study commissioned by Shell and other operators to review more than 100 commercially available technological systems that purported to detect fatigue or distraction in drivers."
Impressive.