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ENET thesis update:
- 2021 Revenues expected at $4M, from which around $2-3M should be considered as recurring (licensing, and others').
- Tarana orders: $1.5M, "which they stated could increase further"
- UEP 60 contract: $1M, "with potential for significant follow-on orders and wider product offerings, this contract could lead to additional annual revenues up to $1.0m in 2022 and further growth subsequently".
- UEP-20 order after passing field trials: $0.8-1M.
- Customised FPGA SoC, $0.4M, "with additional orders anticipated thereafter"
- Indian OEM contract, $1.5M, some unknowns remain but strong acceleration expected according to IR presentation.
-Chinese broadband network OEM: $2-2.5M by 2022, starting to ramp-up during Q2, and $1M+ thereafter, excluding additional orders that are going to be received in 2022.
Total: $9M+ of current visibility, mostly from already received orders, which is assuming:
- 0% growth from licensing and legacy contracts such as aviation, PON, others
- 0% acceleration from Tarana...
- Further $1M order from UEP not executed
- 5G will contribute at $0... (china UPF, USA/Europe DUs), but ENET said they expected Revenues from that in 2022.
- no new deals
I think that right now $9M in Revenues during 2022 should be easy to forecast by the market, being conservative.
My own projection is a range of $10-14M but skewed towards $10-12M, because I include extra optionality on: 2021 level of recurring revenues towards $3M and not $2M, also the $1M option from the UEP 60 contract maybe will be executed, and the Indian OEM + Chinese contracts could add another $1M that are not forecasted at the "conservative" $9M projection.
Over the coming months, we could also have another few million orders acceleration from Tarana, any wins in the DU/UPF segments, faster than expected ramp-up from licensing/legacy avionics segment, or new deals. All of them together could make the $10-14M range to be proven very conservative.
Main risks around components shortages and further delays on deployment issues. The shortages are a risk but also a catalyst as OEMs and server providers know that issue and are planning orders in advance, ie this increases the company's visibility over the coming 12m.
In my opinion.
Tracy, yes I know.
But you also know how I forecast the short term. And you also read my article, so I think you know how I project the long term.
I expect 2m i to 2022 and 1m into 2023
I just woke up 3m before receiving the email.
Just lol. We should go to 70p just now.
Big big congrats enet team, time to shut up some mouths!!! Your success is our success
Good mornig!!!
enet only needs to announce another $2m orders during Q4 from Tarana to explode...
djadja enet!
40+ views (by PMs) to my enet thesis & updates at SZ this week...
Skid
If you are a HF you have a call with the company only sending an email. I know david met other PMs (at least 1) as I referred to them
The level of data you have access to working at a fund is incredible. Very difficult or impossible to get there as a PI (at least much more costly). Still, many private investors overperform HFs
I would be surprised if the run-rate deliveries in the DWs go from 0 to 60-100% in the first year of the deployment (India, UEP, Tarana...).
Usually it takes time, 3 to 4 years to reach full run-rate and I expect something like 25-33% in the first year, 50-65% in the second, and the rest in the third/fourth. Plus new contracts and expansions into current projects
I expect 2023 to be the strongest year if everything is on track
Yes, $9-14M would be my range but the probability is skewed towards $9-11
2023 $20M+ but that coukd change significantly
Thanks Tracy
I agree with you and I asked to the company about that but not sure if they want to say...
"Sell the Company’s proprietary ACE-NIC FPGA NIC hardware (and future generations), that will embed the Company’s IP and software stack, *****which may result in the Company requiring additional working capital to fund the manufacturing process for large volumes*****."
We were said that DU potential was massive.
We were said that Enet was in field trials for its DUs with several major vendors. And we know the DU market is going to fly from 2022, potential is huge.
We were said that if the company was successful with DUs they would need additional capital for WC.
Enet raised capital for WC when they said a few months ago that it was not needed for operations, only WC.
I see a correlation, maybe it will be causation. Time will tell. patience and buy chips!
again...?
let's look forward
I think the placing is a clear indication that DU field trials are on track... I will never fully understand the 35% discount but I don't have the knowledge
Hopefully Q4 will be very strong. Yesterday we had news sooner than expected. This is just getting started!!
Please buy chips guys!!! 14 months lead times
Dallo
Do you know that for sure? the massive oversubscription? Did they tell you beyond PR?
that' one question. The other one is: who had this crazy number of shares to sell and why is selling
Well said dallo
As I shared yesterday I think they have secured $7-8M in orders already and we never had this in the past. I think but not sure that customers can not cancel that and the only risk would be at the supply side
If 2022 is as expected a 6-10x 2022 trailingsales multiple should be out of the table