Member Info for Maxi19

Good spot Kooba.

It's a mystery why ST haven't listed their SWIR sensor on their website or given it more publicity. If there is a grand reveal though, and especially if a new product markets its SWIR imaging, things will get exciting.

I think you're taking healthy scepticism too far.

If you don't see anything encouraging in a San Fran hedge fund investing in a completely under the radar UK small

cap then fine, but they won't have jumped in without giving it serious thought.

I've said before that rumours about upcoming products could be what moves this share price, particularly if they involve Apple.

If Apple plan to use SWIR technology in a serious way and that information leaks, if would take about 2 minutes of googling to find out that ST are making the sensors and Nanoco are supplying the dots.

That doesn't mean most hedge funds lose money or that the majority of their investments are unprofitable. Most hedge funds do make money, but because they charge ridiculous fees they need to really outperform the market to attract funds over the medium and long term.

One bad year, one bad investment can destroy a hedge fund or manager. Look at GameStop.

I'm not saying they couldn't be wrong, but I'm far more encouraged by a hedge fund jumping in than an asset manager who only invests because they want a bit of small cap and tech exposure but otherwise know nothing about the business.

NGR, hedge funds employ very smart people who go to great lengths to get an advantage over the market.

It's very likely they have some kind of insight or knowledge that we retail investors, or even the company, don't have. Quite possible they know what's happening further up the supply chain.

The success of this company entirely depends on whether QD sensors reach high volume production. It's very black and white and no analysis of the balance sheet or income statement can answer that question.

The fact that a San Fran hedge fund is making a sizeable investment in a UK microcap strongly suggests they have a strong view or very good knowledge (possibly via an Apple contact) that we will reach high volume.

Sorry, I think I may have got my very clever theory wrong, as the bonus share price targets are by reference to when the results for the final year are announced, not the SP at the end of July.

So apologies to Brian and Liam if they're reading this.

TwoGood2Die, yes the LTIP options reward share price increases (although in recent years only 50% with the remainder vesting according to undisclosed revenue targets).

This year, options awarded in November 2021 could have vested. However, the minimum vesting price was 30p so unless there was a massive SP increase between now and the end of July they wouldn't have vested.

Every November LTIP options are issued based on the share price in July. So if BT is awarded e.g. 400k of LTIP options, if the share price in July was 20p he'd receive 2 million, but if the share price was 15p he'd receive about 2.7 million. So he'd benefit in the long run from a lower share price.

The share price at the end of July is important for the directors with LTIP bonuses as it determines whether options already held will vest and how many options they'll receive in the next grant.

For FY2024 the target SP was 30p for the directors' options granted in 2021 to vest. That would have vested 25% of them. That was obviously very unlikely to happen.

But now that the SP has cratered 25% Brian and Liam stand to be awarded 33% more options that will vest in 2027. Given the low price and the 150% salary proportion it could be a massive number which if the company fulfil its potential would essentially allow them to retire.

Makes you wonder whether today's disclosure had an ulterior motive. The company had only guided further orders in CY24 not FY24. No reason for the trading update to be in July rather than August.

Kooba, you may have missed this but on the sensor's previous product description it said the sensor has a quantum efficiency of over 90% max and 55% at 940nm. That is consistent with NIR quantum dots, including in presentations from Jonathan Steckel.

If you look at the product description for the VD56G3, the QE max is below 90% and at 940nm is about 20%. So there is a clear difference between the two which can be best to explained by quantum dots.

Kooba, I share your frustration at trying to connect dots with tiny details, but the VD55G1 does have a v.good chance.

That sensor isn't just a QD sensor. It has a whole host of new and improved features. The uptake won't depend solely on our dots.

Kooba, the quantum dots are only one part of a whole new sensor, in which way more than a few million would have been invested.

Nanonano, the amount of lead is tiny and not in excess of any environmental regulations. Some companies may have a blanket ban but if Apple doesn't that's all that matters.

I really doubt ST would have invested so much in the technology if they weren't very confident about volume sales.

Kooba, it's a bit excessive to say there's no demand.

Ultimately what matters here is whether ST's sensors get into high volume phones. The iphone 18 in 2026 is a good candidate, which could give us a high volume order at the end of 2025.

I struggle to see why a delay to a low volume order now should affect that potential high volume demand. It'll be good to get more visibility in October.

But I do agree that the tone of the RNS is slightly worrying. I said below it could be because Nanoco have no idea what's going on, but possibly you could read more into it.

Theory 1 - there's been a delay for whatever reason but production and demand is still expected to ramp up.

Theory 2 - ST decide to can the technology having just started commercial production.

How is 2 more likely than 1? You have to assume the most plausible explanation.

My guess is that Nanoco basically have no idea on why the delay's occurred or what it means going forward.

Even if businesses have a close relationship they're not going to share everything with each other. Presumably ST previously told Nanoco to expect orders in FY24. Now we're nearing the end of FY24 Nanoco must have checked with ST whether they need orders before August and ST have said no and left it at that.

The RNS didn't say we shouldn't expect orders in CY24 because ST haven't told them that. And why should ST tell Nanoco when exactly to expect the next order?

So unless I'm missing something Peel Hunt seem to be jumping the shark.

Unfortunately it's rubbish for shareholders because the company has to issue an RNS with a revenue warning, when actually it could just be a minor delay. Without further ST guidance though the company can't reassure shareholders about future orders at all so it looks very negative.

Kooba, you may be right but I think it's very unlikely ST would pull the plug on gen 1 having come this far and started production already. Also, it does seem likely the VD55G1 has QD film which they just marketed today in the BrightSense webinar. So overall I'm not too concerned.

Nanonano, that's basically saying we don't know why the delay's occurred but will update once we do.

I don't think it's likely ST have scrapped the tech having just gone into production or are going to produce it in-house.

LordWM, they were possibly obliged to disclose it because it's essentially a profit/revenue warning as revenue will come in marginally below forecasts.

It's puzzling why they felt the need to disclose there wouldn't be another order in FY24. They've only said there would be additional orders "this year" which surely means CY24. I don't think any shareholders were expecting differently.

Unless it's a sign of something more serious, I just don't see how a drop of 25% of mcap or 80% of EV can be justified. I know the company's been a series of false starts but STMicro would not have come this far and invested so much just to pull the plug now.

If we get another order in the second half of this year, or if a SWIR product comes onto the market with good publicity, or we get a display JDA, then the SP should bounce back pretty quickly.

There could also be a leak about the future adoption of the technology. For example, if iphone 18 is going to use a SWIR sensor for under display Face ID that could easily leak in advance, it happens all the time.