Cenkos Research on CAP-XX17 May 2021 13:47
Copied this from the ADVFN board by Bomber 13. Thought it was worth sharing on here.
What seems abundantly clear from the recent research note on CAP-XX by new joint broker Cenkos is that its conclusions are conservative , and one strongly suspects the company itself would have encouraged such a message.
Three striking features stand out for me -
1) Forecasts for the year to end June , 2021 are broadly similar to those of Allenby , the other joint broker.
Total revenues are expected to be 14% up at A$4.1m , but , excluding royalties and licence revenue , which are now understandably suffering from the loss of Murata royalties , underlying product sales are expected to be up 40% from A$2.6m to A$3.6m .
However , looking at the half-yearly splits , second-half product sales are only anticipated to rise 14% on the first-half of 2020/21 from A$1.7m to A$1.9m .
This continues to look an extremely conservative assumption given what the company has been saying . CAP-XX's order book was 75% up at end December , 2020 , over 100% up at end January , 2021 , and still 100% up at the time of the interim results on 25th February.
The newly relocated X-Murata plant was only commissioned in very late 2020 , and has been steadily gaining commercial traction throughout 2021.
Moreover , the group's contract manufacturer in Malaysia , NationGate in Penang , had been affected by COVID 19 constraints in the first 6 months of 2020/21 , and CAP-XX has publicly stated that it expects increased output in the second-half.
2) Thanks to the Cenkos note , we now have forecasts for 2021/22 , and 2022/23 for the first time since the arrival of COVID.
Total revenues are expected to rise over 50% to A$6.5m in 2021/22 , and then all but double to A$12.6m in 2022/23.
Splitting out royalties and licence revenues again , the 3 year progression is even more impressive from A$3.6m to A$6.4m to A$12.4m .
However , Cenkos has assumed a 25% loss of Murata customers , and only a slow steady climb back to some A$8m of revenue for the remaining customers by end 2022.
Given that Murata's customers would have probably built no more than 1 year's worth of stock before the plant relocation to Sydney in 2020 , and that there still remains little or no alternative to CAP-XX's thin prismatic supercapacitors , this is a fairly conservative expectation.
Cenkos has also taken no account of any success in receiving the A$5m of damages owed by Ioxus , nor further success in winning new licencees , nor success in the Maxwell/Tesla infringement case , which could obviously have a profoundly positive impact on both finances and prospects.
The X- Murata plant has raised CAP-XX's total supercapacitor production capacity to just short of 10m units pa , and , significantly , the 2022/23 revenue forecast not only represents just 50% of this capacity , but also just 1.4% of the global supercapacitor market .
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