Cyanconnode Share Discussion Threads

[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

[orange1] 17/5/2019 11:29

No inflection in the shareprice graph line.

[stupidboypike] 17/5/2019 11:26

davep, that's very helpful indeed - thanks.

Best regards SBP

[mtw] 17/5/2019 11:15

Maybe there is an inflection point in the company transforming pipeline causing all the white labels to clump together constricting the newsflow phase.

[davep4] 17/5/2019 11:14

I believe I can provide some links for you Fred, (give me a few days as I’m away).

SBP, I believe Execs wanted to recognise £3.1m from the BI contract, however Non Execs disagreed.

[fred splange] 17/5/2019 10:59

Do you have a link to the 10% estimate?A different communications method (Zigbee 868MHz) will improve this for about 3.5% of propertieshttps://www.smartme.co.uk/technical.html

[davep4] 17/5/2019 10:25

It doesn’t quite work like that Fred. The estimate is still 10% of 23m not 2%. Incidentally SMETS2 uses G2 & G3, (not G4 & G5), so it will be interesting to see (in the future) as to what extent Telefonica is prepared to maintain legacy networks.

[stupidboypike] 17/5/2019 10:12

Hi dave,

No I'm referring to the difference between the brokers forecast of £8m and the actual £4.5 See timbo003s post 517 for details.

Best regards SBP

[fred splange] 17/5/2019 10:00

https://www.ofcom.org.uk/research-and-data/multi-sector-research/infrastructure-research/connected-nations-update-spring-2019Latest report shows England data coverage at 98%. 2% of 23m =? It shouldn't take you long to do the maths.

[davep4] 17/5/2019 09:58

SBP If you are referring to 4.5m v 4.7, due to new accounting standards, 200k will now be recognised in 2019.

[fred splange] 17/5/2019 09:57

The new wireless smart meter network, operated by the Data and Communications Company (DCC), will cover more homes than are currently covered by 4G . In Ofcom's latest Connected Nations report, just 88 per cent of premises receive data from mobile networks. The new national communications network will cover more than 99.25 per cent.https://www.telegraph.co.uk/property/smart-living/why-you-dont-need-mobile-signal/

[stupidboypike] 17/5/2019 09:43

Hi Multibagger, was there any discussion on the discrepancy between brokers forecast and actual revenue? Best regards SBP