Member Info for Seeing-2020

Auto revenue is made top of

- license revenue at 90-95% margin
- NRE (non recurring engineering fees) at very low margin

The auto license revenue is the element he can confidently say will double every year, NRE is lumpy and depends on what RFQ is won within the time period

The important point for me is that its the element that achieves 90-95% margin that is doubling.

https://www.bmwblog.com/2022/05/17/bmw-3-series-sedan-facelift/

"With the LCI, the 3 Series gets some changes to the cabin as well. For the most part, the 3 Series Facelift gets the same interior as the BMW i4, with the same new iDrive 8 integration, the dual infotainment screen setup, and BMW’s latest digital gauges. By now, most BMW fans are familiar with the look and layout of iDrive 8, having seen it on the iX and i4. But for those that don’t know, the iDrive 8 system features a much larger touchscreen, climate controls integrated in to the main screen, and the updated digital gauges, which are most customizable than before.

We are part of the idrive8 system for BMW, looks like they have made a decision to ro this across all models, not just new launches but mid model refresh also from summer 2022.

https://www.bmwblog.com/2022/05/18/2023-bmw-m3-g80-interior-image/

"The German luxury brand says all cars produced from July this year will switch to the iDrive 8 as standard equipment."

A quick search this morning and I found
- X7
- X6
- M5
- M3
- M2
- 1 series

I would rather have the 12 million options and the 5m "performance related" shares.

The scheme should motivate Paul to create shareholder value

https://www.eroad.co.nz/nz/why-eroad/case-studies/how-technology-is-helping-dynes-transport-tackle-driver-fatigue/?utm_campaign=EROAD-General&utm_medium=social&utm_source=bambu&blaid=3010549

https://www.safestocks.co.uk/

Blue sky valuation?

As to valuation? Well, I’d value Seeing Machines’ Auto division at US$5bn minimum, Fleet about the same. Aviation isn’t as advanced but it’s a huge market that it is developing, so say US$2bn. In total, its intrinsic value is approximately US$10-12bn today.

Alternatively, If someone has the nous to offer 50p a share and SEE accept, well done. In 2 years they could probably float the company for 5x to 10x that. 

Some will doubtless say I’m talking nonsense. But the same naysayers said that 4 years ago when I predicted Seeing Machines would grab a 75% share of the global DMS market.

This feels like the mid 80's and the revolution has started, people are putting on their leg warmers and dancing to this new craze.

I had nearly retired Jane Fonda but Seeing Machines have delivered, huge respect to the team, above all else for their patience.

I give Kevin Tanaka a lot of credit for this one, huge things to come in Japan. Those with good memories will remember when we got very excited when the Xilinx 3 joined many years ago, with good reason.

Terry, how are you mo chara.

First Group operate the Croydon Tramlink on behalf of TFL, not sure we ever got an RNS for First Bus.

https://www.cpt-uk.org/blogs/safety-how-technology-is-playing-its-part-in-passenger-transport/

We are in business to transport people safely, and this technology is fundamental to that”, commented Terry Sparkhall, Applications Manager at First Bus. “While it can seem daunting to drivers, in our experience and with the right guidance and support, it is embraced. They see it as an assistant, keeping them and their passengers safe, rather than a big brother.”

Market doesn't like that Redeye comment, they are down 12%, I wouldn't want to do the maths on how much Affectiva are down on their sale / investment in Smarteye (as they were paid in shares), Rana might need to write a new book.

People always tell me to keep an eye on rivals, no comment from me I will leave that to their house broker

Smart Eye: Weaker than Expected
Research Note Thursday April 28
?
Redeye concludes that Q1 was weaker than our expectations. Revenue was 17% below expectations, where Automotive was on the weaker side and Research in line. Supply-chain constraints imply longer development lead cycles, which somewhat postpone the company’s revenues. Redeye will lower its short-term estimates and lower its valuation by around 15% after increasing its WACC.

Up, time flies and all that, but L3 was last last Oct, ie Oct 2020. Not holding out much hope for that one.

It was $13bn, so increase of $3bn

From their results pres 27th April

"Design-win pipeline >$16B(2) on continued traction and design-wins across global
automakers and Tier-1 customers for our Snapdragon® Digital Chassis™ technology"

Soul, the point See the potential was making was that the booked revenue will drive the takeover price, thats a view I agree with.

Personally I think the booked value for auto will be above A$1bn by the time the current 11 live RFQ are concluded.

That then gives an acquirer 2 important data points

1) our % win rate of the 12 RFQ (11 + VW already won)
2) clear visibility of future revenue flows

Then can then take a view on how well we will do with the class of 2023 RFQ and class of 2024 RFQ etc and come up with a price they think the company is worth, not based on 2022 or 2023 revenue but on the secured booked business and their view on future booked business

Modest, we have 11 live RFQ at last update and its "within next 2 quarters"

I deem that to be a bit like the "back in 5 mins" sign you might see on a shop door, it is correct at some point depending when you first see it

Terry, when you read this extract from Cenkos, it reads to me more like 100% for the RFQ SM actually bid for, and we know they have bid for all the current 11 RFQ (valued at A$1bn+)

"Smart Eye has won more OEMs at 14; however, it looks like several OEM wins did not go to production and several OEMs look to have since sourced with Seeing Machines either at the brand or group level in subsequent procurements. Furthermore, three Smart Eye OEM wins are with Chinese OEMs and one is a Korean OEM and we believe Seeing Machines has not bid for any Chinese (due to IP concerns) or for a Korean OEM. Therefore, on a competitive basis, whilst it looks as through Smart Eye has won more OEMs, it looks like Seeing Machines has won the majority of the RFQs it has pursued on a competitive basis (since extricating itself from exclusivity with GM/Takata) which importantly includes most of the key large premium western brands.
? Seeing Machines has won a minimum of cUS$144m since the start of 2020 versus cUS$100m for Smart Eye giving Seeing Machines c59% market share by value over the past two years. We believe that this is not an apples for apples comparison and that Seeing Machines has only been announcing values based on minimum production commitments by OEMS to Tier 1s to downplay its market position. This compares to Smart Eye who announces total estimated revenue based on product life cycle volume predictions."

Phil, we have 11 live RFQ totalling over A$1bn, if Toyota are part of that then they are not in-house, if they aren't then they don't matter for now as we have A$1bn+ on the table now, with results coming soon.

This will take a lot of market share. Maybe a reason why Magna invested $10m at 11p.

"While providing an effective and simplified DMS solution, the integrated mirror location also offers an effective cabin camera position and field of view, for both driver and occupant monitoring for many passenger vehicles; with the camera not too high in the vehicle cabin to obtain information critical for NCAP and regulatory standards associated with driver distraction and impairment, and not too low for an expanded interior occupant view, enabling a range of safety and convenience features inside the cabin.

 

Paul McGlone, CEO at Seeing Machines commented: "Building a solution that brings a fully integrated DMS into the rear-view mirror responds directly to the increasingly difficult packaging environment for carmakers with expanding infotainment and advanced driver assistance electronics complexity and ever larger ****pit displays. Working with Magna, a mobility technology company and leading supplier in mirrors and vision systems to the auto market, has brought two leading technologies together and we are looking forward to progressing opportunities to deliver this innovation to the industry more broadly."

https://www.autocar.co.uk/car-news/new-cars/new-2022-bmw-i7-electric-luxury-saloon-388-mile-range

Aaroon, the 50 Paul mentioned has already happened "since xmas we have onboarded 40-50 engineers" he was also very clear SM is best placed (of the DMS providers) to cope with the upcoming demand

Maybe listen to him before demanding speaking to him...