Heiq Share Discussion Threads

[boystown] 07/7/2023 09:54

Well yes - our "frozen" mkt cap is £28.4m which the deal and further AeoniQ potential rather put into context - then there's over £16m in net current assets less all liabilities (the Ben Graham measure) and NTAV of £29.5m - to say nothing of the legal proceedings' possibilities.

[catabrit] 07/7/2023 09:41

Yeah I mean you only need to take a look at Renewcell (£200m MC) to see that the market cap for AeoniQ alone could be massive. Obviously we need to take dilution into account etc.

Carlo is being shrewd about it. He’s giving up some of the upside to get the ball rolling and that makes total sense considering how big that upside is and the various hoops we need to go through to crystalise it. Much better risk reward this way IMO.

[geraldus] 06/7/2023 20:27

Even better is the $250 million price tag for the new factory in Europe.Thought it would be better placed in Asia.

[value hound] 06/7/2023 20:05

I quite like this bit:

"Carlo Centonze, CEO of HeiQ, explained the magnitude of the partnership: "This offtake agreement is valued at over $100M. MAS has taken the risk without the brands' [commitment to buy AeoniQ products] but can now go to brands and say, 'We will have the volumes, and we can serve you.' They are the first [textile] manufacturer who has taken a commitment to invest in a not-yet scaled technology of this kind."

[geraldus] 06/7/2023 08:05

The plant was supposed to be built by late 2024 according to news on 14 February 2022 and the trade press.Anyhow let's see this show back on the road for everbody's sake.

[geraldus] 06/7/2023 07:56

One more point.With just this one partner they hope subject to agreement to manufacture 3000 and 5000 tons in 2025 and 2026.Their pilot plant can only produce 300 tons per year so until the main plant is commissioned in 2026 they will have to produce it some other way and that applies to subsequent deals.

[mmb007] 06/7/2023 07:53

Boss is not a yarn manufacturing company (which MAS is) but a clothing brand/designer. Also, from the presentations previously, the Gigafactory was expected for 1Q 2025.. so 'only' a year delayed... We definitely need to hear more about that in the future from the management

[geraldus] 06/7/2023 07:44

Yes,good news for a change.MAS as the 'first' manufacturer subject to milestones.Hugo Boss was the first surely and all quiet with Lycra as well,even in the trade press.Manufacturing plant now delayed to early 2026 from 2024 also.All will be revealed hopefully sooner rather than later.

[catabrit] 06/7/2023 07:15

Agreed. Shame it doesn’t mention the implied valuation though! I suspect that’s because it’s down meaningfully from the $200m agreed with Hugo Boss!

[boystown] 06/7/2023 07:06

A bit of good news for a change

[mmb007] 03/7/2023 08:46

oh, and you can now buy some HeiQ stuff in the Uk... John Lewis:

[mmb007] 03/7/2023 08:45

Really excellent post Catabrit. The world of 'retail investing' is full of ups and downs and you express the mentality perfectly. I agree with all you say about HeiQ. Their IR is terrible, but they clearly have excellent products than need to be commercialised in a big way.

[hedgehog 100] 01/7/2023 17:08

Thanks for that very intelligent and insightful post, Catabrit.

[catabrit] 29/6/2023 18:33

No that would be market manipulation. Check my profile. I comment on a range of stocks, many of which I own, have owned or am thinking of owning.

I bought my HEIQ shares at close to the trough after putting it on the watchlist at the start of the year. (No idea how it came to be on the watchlist, mind.)

I try to strike a balance when assessing the risk reward. I’m sometimes very wrong, sometimes very right. On smaller positions my batting average is about average. On larger positions, it’s excellent.

This is a medium sized position and only time will tell whether my assessment of the facts is right or wrong.

But look everywhere on the boards when share prices tank and I’d say 90-95% of the participants blame everyone and everything apart from themselves and their ill-discipline when it comes to pricing stuff. Management typically get the blame and I guess that’s reflective of life in general - nobody likes pointing the finger at themselves. Where was the margin of safety at 200p? 100p? Even 70p? For a business model that hadn’t been properly tested? There was none. And that’s obviously been borne out. And frankly there were inklings that revenue can rocket and then plateau before rocketing again. Go back and look at the historic revenue numbers.

I’ve watched all of Carlo’s interviews. Is he promotional? Of course he is! He’s the CEO. He wants a high stock price. He wants to spread the gospel. I don’t see that as a particularly bad thing. He has to rally the troops somehow.

But I’m not sure he’s 100% to blame here. A lot of entrepreneurs are impatient and overly-optimistic and that’s wonderful in a bull market and less so in a bear market. I could obviously be wrong and the guy could be a total crook but that’s not the impression I get. I think he has good intentions and it’s clear he’s a real believer in what he’s created and where the business sits in terms of that secular line.

It’s up to us as investors to triage the numbers, the management bluster, the industry trends and the wider macro outlook when examining the risk reward and the odds / probability implicit in the valuation.

Everyone is fast to claim their genius when things go up, and point fingers elsewhere when things go south.

It’s frustrating that the shares are still suspended and I do think it’s fair to hold management accountable to the delay in the resumption of trading. They promised it was only going to take a couple of weeks and obviously that was far too optimistic.

I also think the IR situation absolutely sucks and needs a re-think.

I really hope they sort the numbers out soon, trim the fat, remain listed and ride this one out because there’s a tonne of potential here when we get through the other side of whatever confronts us from a macro perspective. But with all that uncertainty and no yield, it could be a painful / dull few years unless something miraculous happens with AeoniQ or the graphene business or the claim against ICP.

Considering the industry they’re in, some of their IP / optionality and the valuation today, it has the *potential* to be a total home run over time. Most stuff that’s exciting and on the right side of industry trends is in the private market nowadays. The listed markets are where companies go to die or squeeze the last few pips at crazy valuations. At least in the U.K. anyway.

Anyway. Sorry for my rambling!

[pugugly] 29/6/2023 17:13

Catabrit:- Fair comment and well argued - Are you sure you are not retained by the Company by any chance?

I suspect, as I have said before, that the problems are not ones of technology but more of being over optimistic that having built better mousetraps that the world would beat a path to their door. Unfortunately the world does not usually work like that.

[hedgehog 100] 29/6/2023 17:02

HEIQ was a RTO into the shell AUCT: announced & suspended on 25.9.20, & completed on 4.12.20, with relisting three days later. Not only was the RTO at a sizeable premium to the pre-existing s.p., but the share price of the enlarged entity then rapidly more than doubled.

Since then the technology sector has suffered a massive collapse in valuations, so the subsequent fall of HEIQ should be seen in that context.

But savvy investors should try to look for beneficiaries of this repricing.

In this respect, these lower tech valuations etc. can work in a shell's favour, as it can get more 'bang for its buck', and the IPO route is less attractive compared to the RTO route.


As an example related to HEIQ, the AUCT 'shellmeister' Malcolm Burne has relatively recently brought a new shell to market, that looks quite attractive:-

Milton Capital (MII) 0.9p Market cap. £0.9M.





At just 0.9p (market cap. £900K.), this good value shell is trading at under its IPO price, and at about the level of its current cash, with very low cash burn.


04/10/2022 07:10 UK Regulatory (RNS & others) Milton Capital PLC First Day of Dealings LSE:MII Milton Capital Plc

"Admission to a Standard Listing

and to trading on the Main Market of the London Stock Exchange

First day of dealings

Admission details

Milton Capital plc (LSE: MII) announces that 100,000,000 Ordinary Shares will today be admitted to the Standard Segment of the Official List of the Financial Conduct Authority and to trading on the Main Market for listed securities of the London Stock Exchange. The placing of new ordinary shares has successfully raised a total of GBP950,000, at a placing price of GBP0.01 per share.

Highlights:

-- One Price for All - All investors have come in at the same IPO price; no Founder Shares or pre-IPO rounds; no warrants; no options.

-- No Advisory/Broking Fees - The Company's advisor and broker, Peterhouse Capital, has agreed to waive all advisory fees and commission on all funds raised at the IPO and will receive no annual retainer.

-- Capped listing and on-going costs -

- The IPO costs, including all accounting, legal, PR and Exchange fees, which amount to GBP55,955, have been capped at GBP50,000 by Peterhouse Capital and as such, post Admission, the Company will have net proceeds of GBP950,000 ;

- Total costs for the first full year after listing are also capped at GBP50,000.

-- No ongoing director salaries - The Company's directors will receive no salaries or consultancy fees; compensation will only be received by way of a success fee on the completion of an acquisition approved by shareholders.

Strategy

The Company was formed to undertake one or more acquisitions of a majority interest in a company or business. Any such acquisition undertaken by the Company will be treated as a reverse takeover for the purposes of Chapter 5 of the Listing Rules.

The directors intend to search initially for acquisition opportunities in the technology sector. The theme focus for the prospective acquisition is megatrends. This includes sectors such as space, artificial intelligence, machine learning and blockchain technology.

Megatrends are powerful, transformative forces that can change the global economy, business and society. They drive innovation and redefine business strategies and have a meaningful impact on how we live, how we spend our money and how we invest. The disrupters in particular have produced dynamic profits for early-stage shareholders.

Admission details

Prior to Admission, the Company had 5,000,000 Existing Ordinary Shares in issue and conditional on Admission issued 95,000,000 Placing Shares. All Existing Ordinary Shares and Placing Shares were issued at a price of GBP0.01 per share. ..."

[catabrit] 29/6/2023 10:11

I’m not sure it’s entirely fair to blame management here. I mean a bunch of you bought this thing at quite a punchy price and unfortunately that leaves little margin for error.

They’re aligned with us via their shareholdings and I’m sure the suspension and drop in share price is frustrating, let alone embarrassing, for Carlo and the rest of the management team.

There have been signs of a wider downturn or potential deterioration in consumer sentiment for quite some time. If the management team are at fault here, it’s in not preparing for that or doing enough “what if” analysis from both an operating and shareholder perspective. But that’s easier said than done, especially when your currency (share price) is riding high and gives you firepower to expand the business.

I think the team will pull every lever they can to avoid an equity raise. We can’t rule one out, but I feel it unlikely. They’ll just cut overhead and dial back some of their growth plans.

We still have a lot of optionality here because of the claim, AeoniQ and the graphene business.

Unless Carlo has grossly overpaid, I’m pretty sure that the businesses he’s acquired since the IPO roughly total the current market cap (there or thereabouts). We probably need to haircut those but still, add up the various bits and pieces and the discount is pretty meaningful.

Unlike a lot of businesses in this situation (over-levered, wrong side of secular trends) we’re in good shape. The issue here is the great expectations that were baked into the share price.

It will take time to restore trust and credibility but I don’t see anything that’s terminal.

I could be wrong and that’s the game and so I look forward to receiving the annual report and commentary and what happens to the share price when trading resumes.

[davemac3] 29/6/2023 09:58

I,d say stop buying companies and start making the ones you already have work

[geraldus] 29/6/2023 08:34

Reality setting in.

[jammytass] 29/6/2023 08:27

Absolutely appalling management

[geraldus] 29/6/2023 07:49

AeoniQ partnership take up is not impressive and they do not mention Lycra or the giga factory.No partner yet for Graphenex either.

[pugugly] 29/6/2023 07:33

AGM Statement - Message received - Massive profit warning for when audited accounts are finally released. "Resourced- !!" Could this signal new funding required??

""The audit process has been very thorough and detailed. Although the delay is regrettable it should allow us to move forward with confidence and take comfort in knowing that we will have a more efficient and better resourced organization to support this innovative and exciting company."