RE: Troajan9 Jun 2018 20:05
What Paul Scott said on the 4th June...i agree with...but riding the hype..and will sell half soon
Extract HERE...
Seeing Machines (LON:SEE)
Share price: 9.15p (+17%)
No. of shares: 2240 million
Market cap: �205 million
Automotive design win with US OEM for FOVIO chip
I'm bowing to consumer demand by covering this - it's not a results statement, or even a trading update. So I wouldn't normally cover this.
Seeing Machines had a sales warning last month, which we covered in this report and which knocked the share price below 8p. Here's the previous comment.
For newcomers, this company creates technologies which can monitor human behavior. The major application so far is in driver safety, a market set to grow significantly in the years ahead.
Today's announcement:
Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Group"), an industry leader in computer vision technologies which enable machines to see, understand and assist people, has secured a program design win, working with a major Tier 1 partner, with a global US-headquartered automotive OEM. As a result of the design win, the Group expects to deliver its FOVIO driver monitoring technology into multiple vehicle platforms for mass production from 2020.
The progress made in contract wins is impressive: automotive customers now include "six global Tier 1s and four OEMs with numerous new vehicle models launching in the 2020-2022 timeframe."
There is an army of bulletin board participants who believe in this company, and they may well be right.
But I think I should make the following points about today's announcement:
The A$50 million number mentioned is worth c. �29 million at latest exchange rates, and this is an estimated revenue value.
Seeing Machines has very recently announced a revenue miss and has a track record in the short period since I've been watching it of failing to hit forecasts.
Furthermore, I haven't got any guidance on the profitability associated with these sales. Are they high-margin sales? Will the company be in the black? I don't know.
Finally, the sales won't start to be recognised until FY 2021. How many years after that will it take until the full estimated A$50 million of revenue to be achieved - five or ten, maybe? We do need to consider the time value of money when we are counting revenues so far ahead into the future.
Perhaps this design win will lead to a lot more success and new contracts for Seeing Machines, but I do believe that the standalone value of this deal is probably very small in today's money relative to a �200 million market cap.