Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
Some big late trades that could be short position closing. All at same price. At some point Ennismore will fully clear. End of tax year too. Much cheaper than 70p too.
Main issues here seem to be ability of iqe to match market expectations and make a profit. 2018 they were turning over 156m with 8.66m profit. Dropped to 140m 2019 with 18-19m loss. Go back to 2016 their turnover was 132m with close to 20m profit. Actual profit!! 2020 revenue 46m higher than 2016 yet losing money. Ebidta is only matching 2016. 2016 saw 31.7m ebidta with 34.7m gross profit. 2020 with only 33.15m gross profit and 30m ebidta it gives you an idea of the issues here. 5 years on and gross profit has gone down!!
Story of these numbers is revenue overall has been rising but profits have fallen away. Likely due to poor margins that need to be at 25-30% to match others in industry. Costs rose hugely after they built the Welsh facility? It does not seem to be making economy of scales. Even IQE is not expanding in Wales.
Something has gone wrong as you would expect profits to rise with revenue. If you strip out all one off costs IQE were talking 4-5m profits. It's not like this is a one off as 2021 is forecasting a 3m profit assuming sales don't take off. Not good enough.
This is not the same company from 5 years ago that was making money and looking at strong sales growth.
Costs need to be slashed and margins improved. That or increase sales to contribute to the cost of sales.
If operations are running efficiently, which i doubt, it would mean the big players are squeezing IQE on price. Which long term is bad news.
No idea why you think this is worth 70-90p. Loss making firm albeit with low debt. There is no great advantage to take this over unless you could slash out millions in costs.
So Cannacord have not put a 'hold' rating on IQE. With a price now of 65p instead of 80p. So 5-10p lower might be norm. They site fact IQE margins are low compared to competition. Hence why they struggle to make money here. Squeezed by the big players.
My point is all the new production is not going to the Welsh facility. They have 10 machines active and have new machines on order for Taiwan. They expanded before in Taiwan too.So i assume the Welsh facility is in large parts unused? It had room for 100 machines. So 10% used? You see my point?
If a fund wanted to dump share then maybe. Not so sure. The results were as expected. Just the forecast for year not so great. Pends if Sterling maintains its strength. Covid is causing companies to streamline products. Ford ditching Mondeo. Same for mobile phone makers. That with chip shortages. Tested 60p today but quickly above it. I don't think shorters are active here. One position above 0.5% left. Always high volumes day after results. That and end of tax year.
Sadly this could test 60p soon. Which will mean 33% wiped off the share value. Which is odd considering how many brokers raised their forecasts here. Albeit most of them held positions here. Wonder if TRP will start selling from other fund. Have shorts reduced today? That could be 1 positive. I fear what good news there might be in next 1-2 months. This could be tough. My other concern is Wales site. With strong pound it's maybe no longer viable to expand. What will happen to it?
Yes it was that. I have only skimmed report. If IQE do manage to increase revenue then you consider buying. However Edison not predicting any decent profits. So no dividend on IQE for next few years. Even with profitability up they are not yet announcing an actual profit. Not convinced 2021 will be a profit either. Need a big turnaround.
So revenue was down in H2. Did you read bit about writing off patents near end of report? Which means millions spent to no avail. Also the CSC comments.
Note edison have reduced forecast for 2021 with revenue at 175m and PBT slashed. They mention value of the pound. So Edison have downgraded IQE today.
Quite fair. Revenue is static. Yes revenue is up year on year but at present it is deemed to stay at the same. There is to date no revenue growth expected for 2021. Edison had revenue for 2021 as 183m. So maybe a rise in H2. Of course that has not been suggested. The race up to 90p seems to have been market anticipation.
Any rise here may be shorts clearing. I don't think sp will crash. Just think it needs news to shift the dial here. When will iqe show a profit? 5m profit on 178m is not great compared to 6-7 years back.
Results came out at 7am. Still making a loss. Given huge rise in revenue is not great. They are starting to spend money on new production equipment. Not in Wales. Why they built the facility in Wales is a mystery. See what market think. H1 revenue similar to 2020.
More volumes today. Over 160k. Likely 1 buy and 1 big sell. Not many small with too much stock left. Azimut could get near 3% if they are buyer.
Looks like 1-2 funds here have mopped up the sold shares from other funds. FT shows Az Legan Administra??o de Recursos Ltda. as having 370k shares.
Azimut Capital Management SGR SpA with 462k shares.
Morningstar.com has Azimut Investments S.A. as 554k of shares.
One of the reasons for low daily trades here is Morton and Fiorenzo Tagliabue own 66% of the firm now. With Emma Kane and other directors about 6%. Leaving 32% in other hands. Of which 3 funds seem to own about 6-7%.
Lot of the sellers here seem to be old Porta investors such as Fideity whose original stake was pretty much down 90%. So if results show any kind of promise in May then could we see a rise here? Would Emma keep buying at these prices? As sellers run dry price will be pushed up with good news.
Do still seem to have 2 funds buying and selling taking care not to lower price here. Volumes are very small. Very few private investors involved here. Not sure if this presentation is important or just a standard thing. Doubt anything will get announced. Likely a lot of charts to show what they are doing. See what next week brings. I think reslts and Q1 figures will be key.
Results likely late May early June. Last year got a TU in May with lots of director buys in April. Albeit price was circa 28p then.
https://www.bbc.co.uk/news/technology-56433082
Samsung streamlining new phone releases. At what point does this issue hit IQE. Especially if Apple and others have limited production. Hmm.
Yes what they will do in next few years can never be certain. Making a profit was something that used to be in 10-20m. Revenue has not taken off hugely. It's going up 7% this year. Maybe more next year. That being said demand for mobiles seem strong. Can their new techs demand a good margin for this to take off? Currently no dividend. One to watch. If shorters thought this was over valued they would still be involved. Currently not a holder but share has shot up from 20p to 75p. Of couse for many this is just covering losses.
The company historically has never quite taken off. See what happens.
Suggestion on ADVFN is TRP cleared one of their funds but the other one actually took on 1% of their holdings. Which is about 8m shares. So quite a lot was happening last week. Shorts clearing can't be bad news.