Cyanconnode Share Discussion Threads

[tightfist] 23/5/2019 10:23

As I understand it SMETS1 conversions remain dependent upon GPRS coverage. If there has/is being an accelerated conversion this could suppress the DCC Not-Spot percentage in the short-term?.I also guess that installation of SMETS2 meters (and improving the statistics!) may be skewed towards urban areas, again suppressing the N-S percentage?.(I was reading this morning the latest SMS RNS's. A very different business model(!) but what can we infer from them? Their share price looks pretty low whilst domestic installations are belatedly ramping-up).

[davep4] 23/5/2019 07:49

A lot of these may be SMETS1 conversations to SMETS2.

[multibagger] 22/5/2019 21:20

Smartdcc update SMETS2

10 May 19: 905,891
22 May 19: 1,002,495

An increase of 96,604 since 10 May 2019 in 9 working days (incl Sat)..

or approx 10733 smart meters being added daily...get the feeling that the ramping up will proceed apace.

[davep4] 22/5/2019 13:32

SMIP Further .....

Here is what was said when Connode was acquired in 2016:

"Connode was awarded a contract for 1.8 million C4 units across the central and southern regions of the UK by Toshiba, with an expected rollout date starting during the second half of 2016. The Directors believe that Connode is one of very few suppliers globally that has the capability to support smart meter deployment in areas where there is no cellular coverage.

Connode's potential revenue from SMIP is set out in the table below:

Current contract Expected Best case

Contracted GBP4.4 million GBP5.9 million GBP9.3 million
licence fees
until 2020

Support fees GBP19.3 million GBP28.0 million
(over 15 years)
Total GBP4.4 million GBP25.2 million GBP37.3 million

Initially, SMIP was intended to commence in December 2015, however the UK Government announced in March 2015 that the roll out would be delayed by four months until April 2016. In August 2015, the UK Government announced that SMIP would be further delayed until August 2016. British energy suppliers still expect that the August 2016 deadline is achievable and that there are unlikely to be further delays. However, the UK Government has stated that all deadlines are subject to change as may be determined by the UK Secretary of State.”



Based on the balance reported in the 2018 accounts of £24m, at the year end, it appears the SMIP contract is currently worth:

“Current” £3.2m
“Expected” £24.m
“Best” £36.1m

My guess is the contract will turn out to worth between “Current” and “Expected”

[davep4] 21/5/2019 18:31

Correct, 500k licences were pre-sold by Connode.

[multibagger] 21/5/2019 15:18

Connode pre-sold 500k licences for the UK SMIP programme (confirmed in presentation slide deck in the header - Page 18). So it will be probably next financial year, before we start seeing any revenues from this, unless there is a massive increase in the installation of SMETS2 meters.

£3.60 one off initiation and 62.4p/year recurrent - still a decent sum given the numbers involved x 15 years !

[fred splange] 21/5/2019 15:14

It's not 200k, it's 500k. So probs nothing next year either. 'The first 500,000 licences were purchased from Connode, prior to its acquisition and therefore CyanConnode does not expect material revenue from this contract during 2019.'Last week's RNS

[tightfist] 21/5/2019 15:01

Hi davep4,Thanks for the great summary. Unfortunately they reminded us last Wednesday that Connode had bundled 200k licences with the initial contract, so we won't receive any revenue until the absolute end of the year ? unless the installation rate increases substantially and/or the Not-Spots outperforms 10%.But..... pay day is approaching! tightfist

[davep4] 21/5/2019 12:24

FS, sorry for the delay in providing the information:

1) Telefónica say the contract is for 23.5m communication hubs:


2) Telefónica say 10% of communication hubs will be the cellular & mesh variant:


3) Telefónica say ~5% of communication hubs will use mesh (~4% boundary mesh + ~1% requiring mesh connectivity), equating to 1.175m hubs:


4) Cyan say 10% of communication hubs will use mesh, equating to 2.35m hubs:


5) Zigbee is used for the Home Area Network (HAN), for connecting the in-home display, (smart energy tracker), and gas meter (if present). Cellular is the wide area network, (WAN), which is used to communicate with the DCC. When the communication hub doesn’t have a WAN connection RF mesh is used, (MESH), to connect to a hub that has a WAN connection. MESH can daisy chain or hop several times from one cellular & mesh hub to another, until a WAN connection is found.


6) Cyan’s estimate is twice that of Telefónica’s and with SMETS2 installations running at 200k a month, it shouldn’t be too long before we find out which estimate is correct, (906k SMETS2 meters are now connected to the DCC).



(~ weak approximation).

[tightfist] 21/5/2019 11:44

Hi pldazzle,They seem to be well hidden (confusing title?) on the site but can be found here (tt=xx);hXXps://cyanconnode.com/wp-content/uploads/2019/05/CyanConnode-Final-Results-2019-Presentation-FINAL_15.05.19.pdfAs I mentioned last week 90% of the content was NOT delivered by JC, the slides were presented by Anil (India) and the Connode APAC RoW lead; as a result I found the presentation far more credible. In particular it was intimated that competitor EESL had had cancelled $6.4m worth out of the $10m orders, and that they have only deployed circa 200k meters.Yes, IMO it's an ultra-high Risk/Reward company, (but in an a receivership scenario surely the IP must be worth a useful amount, as is the imminent cash flow from UK SMETS2 Not-Spots). Remember the current MC is a lowly £10.4m......NED and 10% holder DJ-P was in attendance and interjecting at various points. IMHO Deloitte were used as the ultimate revenue recognition umpire between the ED's and NED's, including DJ-P. IoT was played down; market development and revenue prospects were the focus. The brief video of CC automated board production was a separate file; I found it reassuring that something is on the ground and visible, presumably to serve the slide 13 "Others 35%" (non-licensees?) in due course?.Cheers, tightfist

[multibagger] 19/5/2019 14:55

Flag counter has been set up - if the Indian flag comes on, maybe Anil is having a nosey ?

This page is getting more traffic than I expected...clearly a number of lurkers as opposed to active posters.

Welcome France, Malta !

[multibagger] 19/5/2019 06:50

From the meeting - It just reminded me that Anil mentioned that he sometimes reads the BBs and notes the discussions and he knows that people in the UK "get upset or anxious" about Cyan.

[multibagger] 19/5/2019 06:48

Courtesy of and with thanks to ImperialLondon on the other thread...

From Mr Anil Daulani's presentation on 15 May 2019 - India Smart metering projects:

Submitted tenders : 1.935 million
Due to be submitted within 30 days : 578k
New opportunities : 850k

Cyan target in India for 2019 is 1m smart meter order bookings. With us bidding with all 3 Smart Meter manufacturers like Genus, L&T and HPL who control 50% of the smart metering market, we have effectively 3 shots at every bid.

Anil confirmed that Cyan have the largest smart meter deployments in India (about 150k so far, including the single largest project 70k at Indore). This has over 99.5% uptime with 193 meter readings per day per meter...revenue increase due to billing efficiency has gone up by about 23%-26% or so. Return on investment in Cyan smart metering is approx 1 year and 3 months to 1yr 6 months. Indore has provided verifiable and evidenced data on the business case for smart metering and has been visited as a reference site by various discoms and utilities.

For comparison, L&G has 60k deployments and Itron (SSN) has 67k deployments in total in India - these are our nearest competitors. Trilliant is just entering the market and have Head End Software project for what remains of EESL. L&G are more expensive than us and involved in South Delhi project. Itron have not bid on any contracts as they don't have a Tier 1 manufacturer tie up, after Genus started partnering with us. Also more expensive than us. Wirepas is a new competitor but no tie up with Tier 1, so looking at Tier 2 meter manufacturers and could become a competitor in the future.

Slides with these details were put up at the meeting. We were not involved in the EESL project at all and the vast majority of EESL contracts awarded (10.04m) have subsequently cancelled (6.4m).

All in all, India led by Anil is in a very strong position.Election related delays to "code of conduct period", contract awards and implementation ( involving an electorate of 900m spread over 6 weeks, results due on 23 May 2019) has effectively lost us about 4-5 months of this FY.

Still we are in a very strong position....it is a fund manager from L&G selling off Cyan due to instructions from higher up in the L&G corporate chain, due to changes in their business strategy that is causing the price to fall. Nothing company specific in my view.

[davep4] 17/5/2019 23:14

Tight & Empty ... maybe non-execs weren’t enthusiastic about the CEO & COO receiving bonuses for revenues that had no certainty of being delivered, (a repeat of 2017 bonuses paid for NIK order)? Perhaps it even resulted in changes to the BoD.

[pldazzle] 17/5/2019 22:59

tightfist 3189 - "Wednesday’s slides are now uploaded to the Cyan website"

Where? On there's a video of JC discussing the slides, but I can't seem to find them anywhere in legible format. Can you give the link?

[multibagger] 17/5/2019 21:34

Updated the BB header with recent information

From 08 May when L&G went below 3%, approx 2.6m shares in large round numbers appear to have been sold since then. This could mean that they have another 2.85m to possibly dispose before L&G are fully out. Pure speculation on my part....

[emptyend] 17/5/2019 21:19

I don't buy the "very high level in Deloittes" line. The Audit partner in charge would make that call. It is important that revenue recognition is prudent - but fair....and if it includes estimates of not-spots etc I can see that might cause conflict. Ultimately, though, it is what it is....and anything held back for want of proof will flow through eventually.

[emptyend] 17/5/2019 21:11

Thanks for that. Certainly SMETS2 now rolling.....

[multibagger] 17/5/2019 20:27

Hi davep4,

In terms of revenue recognition from BI, I gather that BI actually have to make and ship the nodes, for our revenue element to be recognised. I wonder once the first node is made, whether the IP element of the contract could be recognised or not - which could be substantial ? So for BI to make the nodes (and not build up excessive inventory), BI would need a customer. Let's hope they are in the process of customer acquisition for their (also our) product in countries where we are not represented.

I got the distinct impression that there has been a real crackdown on revenue recognition in light of various high profile companies being given a clean bill of health by their Auditors and then suddenly finding themselves going bust - Carillion, Patisserie Valerie etc. I also got the impression that the caveat that we are "exploring funding options" statement was a part of extreme stress testing of a company's finances by the Auditors - in the event there is no new business to come our way and existing contracts faced undue payment delay.

[tightfist] 17/5/2019 19:00

Hi Davep,The CEO and COO needed to book the BI licence income to meet their 2018 bonus threshold. (What the non-execs thought we know not?) but a lot of emphasis (JC, H) was put on it being disallowed at a very high level in Deloitte - it seems more like common sense to me......

[davep4] 17/5/2019 13:26

MB not so with BI licence, production capability in 2019 H2 and therefore income now hoped for in 2020.

[multibagger] 17/5/2019 13:15

Looks like L&G are continuing to sell down....have to try and work out how many they may have left.

[multibagger] 17/5/2019 13:11

Revenue recognition guidance and rules is very specific apparently. So what would appear as homogenous "contracts" with various discoms in India, each has its own revenue recognition profile. I did not realise the complexity of this issue.

Also I raised the issue of lack of numbers/missing information in RNS releases and was told that if all the numbers/information was put in, competitors could work out our price points and margins. So frustrating though it maybe from a shareholder perspective, I agree that for the greater good and long term prospects of the company it is better that entire information is not in the RNS.

As davep4 says, it was confirmed that the quantum of "reduced" revenue for 2018, has not been lost, but will be reflected in 2019 accounts. So a question of timing.

[tightfist] 17/5/2019 13:03

IMO we need to attract "new money" and see the precursors to that, eg some big orders or a licensing deal with one of the three big Indian market players..FYI Wednesday's slides are now uploaded to the Cyan website