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Hi Chilting, your final point may be the reason it is in fact an open question. My argument is not that Ceres is a bad investment for either firm, but that the status quo has shifted, a point on which we share an open mind.
I agree today's RNS gets the laundry out. It's a reset, and we should not lose sight of the positive Delta contract which to my mind confirmed the business model albeit at a smaller scale. As an investor, the reduced future cash flows matter and will need to be reflected in the price.
Hi Chilting, in fact I agree with your points. "So why would they sell?" If the deal structure between Bosch and Weichai is off the table, will either company look at their investment in Ceres differently? It's an open question.
Savvy, the RNS stated:
"However, we are evaluating other options with Weichai to address the China market. We will update the market on our progress at the appropriate time."
"evaluating other options" almost certainly means there will not be a deal with Weichai in Q1, or in the near term.
No, the key takeaway is the loss of the JV and slowing revenue growth due to factory delays. This provided some support to the RBC valuation of 150, and upgrade to 160 after the Delta deal. The market will determine the price, but if you are holding at recent prices, you may be underwater for a while. Happy for anyone else to share their valuation. Starting point is market cap.
However the company does have an assured future.
Rick, can you explain how a business with >£200M in the bank is being hit hard by interest rates and borrowing costs? Surely they have an advantage because they get interest on the investment.
I think your point is aimed at a start up that is running out of cash, which does not appear to be the case with ITM. Have I misunderstood you?
Hi, I checked up the following RNS:
Trading Update RNS 4 Dec 2023
Full Year RNS 18 Aug 2023
ITM is "well on track" for FY guidance 10 - 18m, so I would expect a mid to upper achievement.
EBITDA loss "trending well against lower end of full year guidance £245 - £270m" - this could indicate a beat is on the cards.
Net cash on books at H1 was £253.7m "reflecting the EARLY effects of the significant progress against our 12-month plan". This could indicate a beat is on the cards for cash, in fact ITM beat for cash on hand in 2022.
I am going to assume the FY 2023 cash on hand is £220m. If I am right then the current market value (@44pps) of £270m, would mean I am 'buying the business' for £30m + £220m cash in bank.
The loss business is loss making, but the losses are reducing, the revenue is increasing and the cash runway is plentiful.
Happy to receive any comments, or to correct my working out if there are errors.
How many investors who reacted to the RBC broker target for CWR, were also aware that RBC was the top lender of last resort for the fossil fuel industry in 2022?
https://www.ft.com/content/63ebd477-5327-422d-8121-9acc477b138c
my advice to you is:
look up the pdmr rns dated 3 oct 2023, which confirmed the chief exec bought £272k at aggregate sp of 2.90
ask yourself whether the ceo was aware of this and other deals at the time.
if you do not think the ceo is insane, then 290 is a back of the *** packet target. however, it's likely the ceo thought his investment will make money, so you might consider a 50% uplift on 290 which takes you to 430.
however, if you really want to know the potential value of the company, i would look into the various full year and half year presentations, going back 2-years (on youtube and ceres website).
as an investor, the hardest part for me, was understanding the product, which won the uk's most prestigious engineering prize last year, and comes with an academic confirmation that the tech is spectacularly efficient. combine the efficiency with the niche-but-significant use cases, and the existing partners who already built sofc factories, factories which are already tooled for soec, and you can conclude that the current share price is still great value.
but dyor and feel free to share here.
Congrats all who held through the daily negativity from 2 regular posters. I again refer you to the 30 Nov 2023 RNS:
"An agreement with the most imminent of the new licensees is progressing well but is now unlikely to be signed in time for the associated revenue to be recognised in 2023."
Word matter. I refer to the phrase "the most imminent" - could that mean there may be one or more other licensee contracts that are also imminent. I would be interested to hear any comment by the BoD about progress with other potential licensees.
As another poster pointed out, the deal announced today included SOEC, so it's a big step forward.
@noggers, drop seemed to coincide with the US CPI / market open (yesterday 13:30 and 14:30), and overnight broker rerate, while the rest of the market opened positively. The rerate appeared to be based upon slow progress last year, which is hardly new. Investors who don't understand the product will be getting cold feet right now. That's where the Nov 2023 RNS comes in. If you don't believe there is an imminent contract, probably best to sell now if not already done so. But if you believe a contract is imminent, then this price is attractive. It's the market supply and demand that sets the price. Let's see where it goes!