Member Info for Tracylied

The point that has been made repeatedly in communication with the company is that they must now be viewed as a complete solution provider. Code, firmware, software and hardware as well as support and development. This is where the growth is even with legacy customers on existing contracts. I thought it interesting that 2 of the 3 legacy contracts in difficulty have now been resolved and are active again. This was responsible for the drop from £1.
Those and other contracts are converted into ongoing royalty deals providing improved returns at near 100% margins. I feel that even with no new contracts they could trade profitably. However there will be many contracts with OEMs who will manufacture and supply ethernity licensed solutions as their own.
I can see real prospect of massive returns. However this has been my view for a year. Now it is closer and we have much more visibility. Unlike others there will be no investment in production or really very much more at all so margins will be very favourable and no dilution.

This is a board with few contributors others I hold have many. This is the share with the most leverage in my portfolio so if the most interest to me.
I disagree about putting faith in the CEO. Don't watch ethernity but the market around ethernity. It is obvious to me that the very defined aspects that Ethernity deliver are absolutely the bottlenecks of innovation. The products are seeing no doubt the first signs of mass demand. The current low starting point produces a situation that will not be experienced again. A 10x or 100x growth can be achieved creating a real wave of investor excitement. That will never happen from a 100m cap. You may laugh at 100x growth but think if the current model provides 10x the profit for each deployment of code and sales increase 10x we have a growth factor of 100x.
This is what I see ahead really starting in the next 6 months.
This is why I post here.

Yes shaping up as we expected. I don't think that it will take much for a speculative rise through 50p. Then news for some real gains. We can expect a couple of deals in the next 6 months and I would not be surprised to hear about additional capacity in Korea.
The interims will discuss the Korea progress in some detail I suspect. In the scheme of things major factors become short term. Certainly a 12 month window will provide big gain opportunity even 6 months.

Really all stated last year is coming true this year. 2019 for contracts and 2020 for mass production. In Korea they have been in "full" production for several months. That will hopefully be disclosed and discussed in the mid terms in a few months. We are still short of vital information about numbers and values. We know that they are moving up the value chain and targeting much bigger rewards. We have no real idea just how big this will be yet. David talks of substantial increases in revenue and we know already that margins are huge often 100%. What will the SP do on a £5m profit or a £50m profit. I can wait to find out.

"our plan is to generate greater value from our existing technology and solutions, by offering
complete all programmable networking and security platforms that we target will generate 10 times more revenue for each use of our firmware and software technology. This has been enabled by the following:
• We developed and obtained application software that can run on top of Ethernity’s Flow Processor FPGA Firmware;
• We have developed a hardware platform to serve as a Universal Edge Platform (UEP) that will host our field proven flow processor for general edge access deployment with a complete programmable platform; and
• We developed XGSPON technology to serve deployment of fiber to the distribution point (FTdP) , cellular site aggregation and FTTH (Fiber to The Home).
These developments will fuel major revenue streams by delivering complete solutions while the telco cloud business is evolving"

"Currently we are in discussions for the mass rollout of the UEP with a major US OEM. The
existing marketplace for this offering is forecast to reach $1.47 billion in 2021"

So what would it take to trigger a major up leg in the SP.
News of sales in Korea prompting a increase in production. Two further manufacturing deals.
Increasing demand for the products.
I suspect that we will get all of that before the end of 2019.
H1 is nearly at a end and the company have more visibility now than ever before.
Really all that is required is continued progress and some news to drive the share price.
I am assured that there will be news and it will be released when matters are concluded.
I am in no hurry. If it takes 12 months I am not concerned.

I don't think that it's going to take much to push the share price up substantially.

They have certainly achieved a lot for a small R&D spend. I was expecting double the cost of development. Not quite champagne yet but it's certainly time to put it on ice.
It's clear that with 10x the income from the previous model multipled over a much larger market the returns will be huge.

"Furthermore, the Company anticipates concluding agreements with two Tier1 OEMs in the FTTH Broadband deployment and EAD (Ethernet Access Devices) existing markets respectively, with rollout and production plans for the latter portion of 2019, and mass deployment in 2020"

A decent performance in my opinion. Some very strong hints. No signed contracts but several in the pipeline for delivery soon so potential newsflow there.
I think that we will like it and speculators will like it but it's still a niche interest. However it does not take much imagination now to see forward.

It's a real problem when it comes to sustainable price movements. Also the lock in risk will be putting some off. Hopefully the 200k will be met with others and we can have some liquidity to drive the market.

50p is nothing with the liquidity here we have seen 5% added on a £500 purchase before. When the cupboard is bare the price escalates quickly. Certainly the IPO price of £1.30 looks very achievable in the short term to me.

I suspect that an update around new partnerships with OEMs will be well received. H2 2018 won't hold many surprises.

I suspect that the two recent sells are the same person that or entity and it is well flagged that there may be more.

This from really the last piece of "official" information to the market 5 months ago. Really tells the market that other deals will be done to manufacture the aceNIC100. I can only assume that the reason is either huge demand or anticipated huge demand. As in the case of the Korean server manufacturer not by Ethernity but by the manufacturer. Let's hope they know their market.

Leveraging Ethernity's successful experience with multiple customers of its first-generation ACE-NIC40 SmartNIC, the next-generation ACE-NIC100 is scheduled for further delivery this year to additional partners and OEMs. This is aligned with the Company's strategy of transitioning from selling technology to offering complete products and solutions, which is expected to result in anticipated significant growth for the Company.

Looking like a sell at 25.50 from 7th June. Certainly buys were through above that. Welcome liquidity.

It really is the nature of the business. Strategic advantage is everything and any deals will come with minimal information on type and size. We don't even know who are producing and selling our products in Korea. We know that they are in full production but don't know what that means. Clearly they have invested in production tooling, space and human resources. I guess that must come with some confidence.
Ethernity tell us that there will be more this year. That must mean that at that point they had advanced commitments.
The new products have come thick and fast over the last 12 months so R&D expenditure can be expected. They have been glove hopping at events so we can expect costs from that.
I know that the company are busy, they have told me that many times but does that equate to earnings, sales and contracts.
I am still very bullish and expect substantial growth in the near term.

Market cap just over cash held it certainly is cheap. We wait on H2 2018 results which should show a improvement over H1. Hopefully also some forward looking statements about the speed of uptake, state of the market and rate of production in Korea. We also need to know of other production OEM deals. Even a moderately positive update should add to the share price.
Shanghai is looming and we will hear increased industry noise.

I suspect that it's just a bit of low level speculative buying. I took a few more today and will buy more next week. Just small chunks for me but they all add.

Buying at 26p full price. Won't take much to tick up.