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Good morning Vascular,
Of course, no one can predict the future, but we can see the signs. Much as we can sense a change in the weather or a change in seasons. You have every right to be cautious and measured. Have you wondered why I started posting again ?
I have been watching this share for many years and its decline based on Vapourware contracts (with hindsight bias) and the inevitable loss of credibility and ongoing issues of multiple fund raises with unfailing regularity. As LTI pointed out, some have been banging on about the next placing with certainty and conviction since early last year.
Do you recall a placing leak prior to one of the funding rounds which caused the SP to fall and the placing occurring at a much lower level than planned ? I rang the company about it at that time. I am pretty sure it was an inside job and I have my suspicions - the FCA can easily collate trading information about that period.
The expected dilutive fund raising is yet to materialise and I doubt it ever will in a manner that some are hoping.
But what triggered the Red Flag/became obvious to me was that unalloyed good news with signing of contracts with a lot of specific details, each one well above the market cap did not bring any sustained SP rise. This is not the normal expected behaviour of a stock in the market which I have intimately involved in over 3 decades.
Speaking to my broker confirmed my thoughts about various "short sellers" and CFD buyers betting on a SP fall. Appallingly worded RNS communication lacking any kind of detail and more importantly raising more queries than they answered did not help. But I have spoken to the company on this matter and they seem to have taken more care and effort in the quality of their communication.
Please take some time to go back and check the messages (click on the names of the posters) of the doom mongers. It will became instantly evident that the language is probably coming from the same person. They even predict the share will go "red" ? How would they have the confidence to predict that and be right, unless they know what their actions are to facilitate the same ? That would happen if they short sell or open another CFD.
So what we are witnessing here could be blatant market abuse "stock bashing" and I want to call that out. It is pretty straightforward to report market abuse and I intend to do that, once I finalise and bulletproof a few minor details.
So there is a method in what I am doing and why I am doing it - it is in the interests of all fair minded investors and purposeful.
Make sure you too call out on suspicious posters - read the LSE rules for posting on this BB. That'll be a good starting point - as it will show where and what the infringements are and also read the FCA rules on market abuse. Market abuse is a very, very serious financial crime with the possibility of a prison sentence and a criminal record. I do hope people will take notice as posts
BST, schoolboy error on your part.
The chart tells you about the past, not the future.
Hi Vascular,
Anyone who has been in the market long enough will have failures - if they say otherwise they are lying. I am of an optimistic disposition with a can do attitude. I won't have run a £400 million a year revenue organisation with over 4500 employees for many years, if not.
You are absolutely right that I am ultra positive on CYAN and have had frustrations with the same as well and I don't mean any disrespect to you or any one else who is less positive or even cynical. They are fully entitled to their viewpoints and not to be dismissed. I always have the choice, like anyone else of using the filter button.
However, there is a more sinister element at play over here.
Count the number of posters and hover /click over their names, to see how many times they have posted and on what stock - you'll see a pattern emerge. Read their language and sentence construction - it is so evident. There is a clear pattern here with posters glued to laptops posting under various aliases and backing each other up (if at all, there is more than one poster masquerading as many ) - it is so transparent and juvenile, it is laughable and amateur. They seem to take pride in mocking, name calling and belittling posters, when they are posting and adding pennies at a time to buy their lunchtime sarnies.
I will post my views and people can make of it what they may.....but I am intending to bring some semblance of balance to discussions here - as the vast many are talking this down. Of course, each has to make financial decisions relevant to their own circumstances - that is their responsibility alone.
I can't be bothered to post a reply to every juvenile question that will fill this thread tomorrow - it will be on my terms.
Always good to chat to you too LTI !
2 solid and ground breaking contracts in the last 2 weeks:
30 Dec 2019: Thailand - about $9.7m - $400k upfront
06 Jan 2020: India - announced £3.3m and likely to be scaled up to 200k smart meters (about $5m), Genus soft terms
I am of the view with the momentum gathering, India will be at full throttle soon. Time to buy - these are not "vapourware contracts" negotiated by wannabe salesmen - these are solid contracts signed by Anil and Bjorn who are people of integrity and character and people I respect !
http://www.mpwz.co.in//ShowProperty/UCMRepository/Contribution%20Folders/Indore/PDF/tender/latestTenderNBids/21.12.2019A/NIT-240_IND_21122019.pdf
With regards to a 250m smart meter rollout in about 3-5 years though repeatedly stated , the logistics to implementation are nigh impossible to make that feasible - and hence I think we are looking at about 10 years or more realistically.
I am also confident that given our OEM status with 3 of the largest meter manufacturers in India controlling over 50% of the Indian meter market, we can estimate between 1-2m smart meter contract wins year on year (conservatively) for the foreseeable future from India. Then, we have Bjorn's territories - and if Thailand is anything to go by, then we are again looking at big numbers.
Not forgetting the EESL/Intellismart Joint Venture, which is not to be underestimated. EESL has ambitions to publicly list at about $5 billion and has secured hundreds of millions of dedicated funding (? can't recall the exact figure) ...that will give the firepower to roll out even faster in India and possibly abroad.
So I know that my large position is very safe and secure - yes, it has taken a whole lot longer than I anticipated, but the upside has grown a whole lot bigger. You are absolutely right Tonyj when you say we are on a roll.....CYAN will gather momentum surely and strongly.
Coming events cast their shadow before...good luck all LTHs !
Good evening LTI,
We seem to be making at least $25 dollars per smart meter (as things stand, but appreciate margins may get squeezed with volumes). So 500k meters a year is $12.5m revenue. Our operating expenses are around $6.14m (converting £1 =$1.28), so that leaves us with a healthy profit margin. This is just the start of the roll out in India and for me it is a clean slate - what has gone before like TNEB, Ukraine, Bangladesh and Iran "vapourware" contracts are of no relevance now to me.
Though there is frequent speculation about our cash position, I am satisfied that there are plenty of avenues for a couple of million or more to be put on the table, without any equity dilution. The fact that our much bigger smart meter partners
are offering us very soft financial terms, tells me that the tide is turning. Guys like Genus are thoroughbred businessmen and will not give a quarter, unless it is in their interest too. They play the long game and I am in it for the long haul too, so short term share price gyrations are of no consequence to me personally, other than causing some temporary irritation.
Have you seen the "hot off the press" 350k MPWZ smart meter tender in Indore dated 21.12.2019 and scheduled for opening on 04.02.2020 ? I'll post a link when I can, or the grown up posters can look it up. The extremely tight timelines and the confidence that this massive number of smart meters can be procured, is to me a clear and unequivocal validation of the resounding success that we have made in Indore with over 100,000 smart meter installations - the largest in India by far.
On the basis of our track record in Indore, I am very confident that we will win this 350k smart meter tender too as it is a given that we will bid. This is worth about another $8.75m. So much as people wish our company to fail, they are not going to see it happen.
And of course, after 30 very successful years in the stock market, with massive holdings in a number of listed companies included declared positions, I don't need any validation from the various doomsayers and probable shorters / CFD holics on this thread. They are perfectly entitled to their view and their method of making money - it is falsehoods, selective interpretations, deliberate misrepresentation and "stock bashing" that may well come back to bite them, faster, harder and longer than they least expect !
The best thing to do ITT is to email either Mrs. Heather Pea**** or Mr John Cronin and get it from the horse's mouth - so to speak. So there is absolutely no doubt in your mind about the source or authenticity of information, or that either I or someone else is distorting information to suit any particular agenda.
There is too much fake information about as we all know !!
No sorry I can't post a private email reply from from JC on a public BB. It would be disrespectful and wholly inappropriate.
You email JC and get the reply , as it you and CB are having the doubts.
I am perfectly clear in my own mind on this issue.
Hi ITT and CB,
I have asked JC after this issue was raised by CB had an email reply.
We only need 500k units annually to make a very healthy profit.
No confusion on my part - It was after that email, that I confirmed that we needed 500k smart meters, not 10 million to break even.
£3.3 million is CYAN revenue, not overall size of 142k meter rollout which will be far greater.
Now it looks like roll out is going to be 200k meters - therefore about £4.65m is overall contract value
80% of revenue to be recognised in 2 years = £2.64m
20% over next 7 years = £660k or £94k per year
And this is besides the Thailand contract value of about $9.7m
Other awaited Indian contracts of about $12m
We are able to get decent money upfront and soft terms from our partners.
Operating expenses of CYAN is about £400k per month = £4.8m per year
So ITT please explain why we need 50 such contracts to break even ?
Or even worse 10 million smart meters to break even ?
Astute observation Jarv55 !!
About time too as the bug bear of funding is what they were anchoring their "shorts" on :)
And we are awaiting news of other Indian contracts from 31 Oct 2019....so another $12 million worth of contracts based on Arden Research report.
Good morning all....we now have confirmation of a £3.3m Purchase Order with a 15 month scheduled timeframe for full completion with 80% revenues being recognised in 2 years. Also I note that though the initial order announced on 16th Dec 2019 was for 142k meters, but now Genus is provisioning funding for 200k meters. Why would they do that unless the scope and scale of the rollout has increased to 200k meters ?
Also CYAN have spelt out how this Project is going to be funded and it looks like Genus see us as a "mission critical partner" in their corporate strategy, as they are backing us with what appears to be a facilitatory and supportive financial package.
I am hoping that the clarity of the RNS particularly with regards to funding allays fears and reassures the market.
The overall tone of this statement and more importantly the reading of the soft signals from Genus is one that has caught my attention. Await hopefully positive market reaction today....
Vascular,
I vaguely seem to recall that Jammu and Kashmir was one of the states that we were bidding in - but can't seem to find the the slides that were put up after the presentation which could clarify that. The article says that tendering process for 80k meters has been completed...so I am speculating that it could be one of the "delayed contracts" that we are waiting to hear on possibly ? Good sign to hear that a further and much bigger rollout in on the cards.
Momentum seems to be building with the rollouts.
Vascular,
CYAN RF mesh tech is one component (albeit an important part) of the smart metering solution and we are a B2B supplier. We have no direct relationship with the utilities or end customer. When we bid for tenders, we bid in consortia with the meter manufacturers and its their financial track record and sustainability that qualifies us to be a bidder.
The fact that we are working as OEM to the 3 biggest meter manufacturers in India who hold about 50% of the market share is no mean feat. We are also seen as an Indian company given our subsidiary for "Make In India" purposes, I would imagine. If meter manufacturers were unhappy with our technology or with the Indian team representing CYAN in India, they could have easily chosen other partners - they have not done so. So it is definite endorsement of our technology and a hat tip to Anil and the team and their relationships over there.
Though I can see where you are coming from in pointing out our lack of financial muscle and track record, we are a very important cog in the smart meter rollout in India. We are standing on the shoulders of giants.....and the Indian elephant is hopefully coming out of a long slumber. There seems to be a sense of urgency and an acknowledgement that previous smart metering plans have not worked out. It takes humility and courage to accept that and move forward.
The "shorters" on here are making merry on the back of the perceived funding uncertainty, the push back of the financial year end and the change of Auditors as being red flags.
The company has declared that they are looking into non-equity dilution routes to raise funds and I am sure if that is nailed down and there is strong Director buying, coupled with announcements of actual revenue and cash position that will stem the shorting jamboree.
Let's hope we have some positive statements about the delayed Indian contracts.....
Power Secretary in India is talking of Rs.4 Lakh crores investment in distribution sector in electricity
From 01 Jan 2020
https://www.cnbctv18.com/energy/looking-at-investments-into-generation-transmission-and-distribution-says-power-secretary-nandan-sahai-4973991.htm
Jargon Buster:
Rs. 1 Lakh = 100,000 or Rs. 0.1 million
Rs. 1 crore = Rs.100,000,00 or Rs 10 million
Rs 4 Lakh Crore = Rs 4 Trillion !! ( I give up trying to get the number of zeros following right !!). Whatever it is, it is a stonking big number, probably about $40 billion - and that's just for distribution (smart metering side of things).
Exchange rate: £1 = approx Rs 94 (let's round off to £1 = Rs.100 to save us all going mad !)
From 31 Dec 2019
https://www.livemint.com/news/india/india-plans-35-billion-power-reforms-to-revive-ailing-utilities-11577784511096.html
From 03 Oct 2019
https://www.livemint.com/market/ipo/eesl-planning-an-ipo-at-5-000-cr-valuation-11570037826221.html
ColourBounce, Thanks for looking and no joy my side either.
Having thought about the figures you mentioned and given the healthy margins we currently enjoy, I would be very surprised if we need anymore than 500k smart meters in a year to turn a solid and healthy profit.
I suppose that the 10 million meters you mention, would have been put forward in a business projection context, rather than from a P&L perspective. If that were indeed true, no one would be able to save us at all !!
I am satisfied that we need about 500k smart meters a year to turn a solid profit.
Many thanks & much appreciated Colour. I'll shall dig around for it as well, as from what you say, it has been published and therefore in the public domain.
adam87
Some are long and some are short...depending on what, when and how they post, it's simple to identify the who is who. It takes all types to make the market - and in any transaction, someone has potentially made a misjudgement (open to interpretation and a point of view of course).
Intriguing comment ColourBounce - ".... Just a little help, the business plan to become level and solvent is 10 million connections...."
I would be grateful for your analysis and explanation in a simple language as to why 10m connections are needed to become "level and solvent" ? As by my simple arithmetic, it looks like 10m connections @$25 dollars per connection is worth about $250m. We don't have any debt and our operating costs are about £4.8m per year.
What am I missing ?
Good morning Longterm Investor and all !
Lovely to see this $1.6m contract with $400k upfront and it is more than likely that we will go on to install the 200k meters in due course. So about a $9.7 million contract all told. Well done John, Bjorn, Heather and the team !
So good to hear about all the background activity that CYAN are involved in. It looks like we are talking and participating at a decision maker level in the Indian Smart Metering ecosystem development. There also seems to be an urgency to move this Smart Metering programme forward and the setting up of a JV Intellismart and USAID augurs well.
Though we all know that 250m smart meter installations in 3 years is not possible, it at least indicates ambition and urgency from a Government. Hopefully, there may be money attached to "pump prime" these massive initiatives including for partners / vendors to grow capacity.
So though people are not unreasonably speculating that cash is an issue given the contract delays, given the reduced monthly spend and possibly access to bank loans, invoice discounting etc mechanisms, it should be possible to avoid equity dilution.