Investors Chronicle tips SEE to double18 Dec 2024 07:52
Lovely tip from IC yesterday. Here it is:
"Seeing Machines (SEE) is an automotive tech business that has two major advantages in its chosen field of driver monitoring systems (DMS)/human insight AI. First, low competition, as it is one of only two players operating in this space (Sweden’s Smart Eye (SW:SEYE) is the other); and second, EU General
Safety Regulations (GSR) requiring all new road vehicles to have a DMS system installed from mid-2026,
and similar legislation such as The Stay Aware For Everyone (SAFE) Act in the US targeting 2027
universal roll-out. Similar drivers are in place in most auto-manufacturing nations. A DMS uses cameras
inside the car to monitor the driver's behavior and alertness by tracking their eye movements, head
position, body posture and steering inputs. It also checks for seat belt use by all occupants, eliminating the
need for expensive pressure sensing and buckle switches. It can also be used in private and commercial
aircraft and non-highway vehicles (Caterpillar is a major user). There are already 2.6mn cars on the road
with the group’s DMS installed, up 100 per cent in a year, with users primarily licensing IP rather than
buying actual hardware.
Analysts see compound sales growth of 25 per cent here and a steep rise in profits after turning Ebitda
positive this year. There has been some history of timing misses on revenues and some concerns about the
group running out of cash, all contributing to a weak 2024 share price performance. However, strong key
performance indicators (KPIs) in the recent Q1 update have boosted confidence and, as the regulatory
deadlines loom ever closer, this has given the shares a kick upwards. The future could still be rocky here
as original equipment manufacturers (OEMs) continue to struggle, but there could be very strong
performance, potentially even a doubling (or more) of the 4.25p share price."
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