Iqe Share Discussion Threads

[jimboyce] 04/9/2018 15:18

Let's hope and trust that management have left a good amount of room for manoeuvre going forward!

[jamesrowe] 04/9/2018 15:14

I note that the latest Edison report on IQE says:
"Taking this approach, the shares look fairly priced at current levels, although investors should note that we are modelling photonics revenue growth towards the lower bound of guidance."

So it all depends on how conservative management were with photonics revenue forecasts and how well they are executing against that.

[paradores] 04/9/2018 14:16

Elaborate, Canny

Apple Issue? 3D facial across more Apple products..? Production costs to ramp up production to meet orders or achieve improved operational leverage..?

The future market opportunity is clear enough, the future short case is not.



"Multiple H1 2018 investments in VCSEL qualification programs extending the global footprint for 3D sensing in consumer and other high growth applications.

"Since period end, qualification of a further two major supply chain partners has been completed, with initial production for Android OEMs now commenced.

"Guidance re-confirms consensus forecasts range as H2 2018 ramp in VCSELS re-commences."

VCSEL are going into Android devices whether shorts like it or not... [Probably not] ;o)

The risk to 2H18 revenues IMHO is delivery, as Sweenoid picked up in his July foundry tour new reactors have also been installed in IQE's overseas facilities

[mhassanriaz] 04/9/2018 14:09

You will see very soon shares at these levels will be hoovered. Brokers and researchers are used at will if 170p is good for One and 91.6p is good for the other. I am not relying on Apple anymore the game is in aerospace, Elec. Cars and 5g.

[cannyshoveyergrannyoffthebus] 04/9/2018 14:08

It should also be noted the Apple issue is large been ignored on this thread at the moment . IQE will need to sink further capital .

[cannyshoveyergrannyoffthebus] 04/9/2018 14:02

avery , however today they say 91.6 p assumes for them their best possible growth forcast . The impression given that this on current past performance. the updates will not be met. Certainty no one should be a new buyer today , we have not seen the 2018 bottom yet imho.

[averyb] 04/9/2018 12:59

Jeez Crunk, you love wallowing in negativity. Broker's only just reiterated a few days ago, Barclays and Peel Hunt at 170, Cannacord at 190 and Deutsche the lowest at 110. And Edison's opinion hasn't shifted 'hugely' either, they said it was fair value in their last report when it was at 103.

[thecrunk] 04/9/2018 12:46

Edison just hugley revised their forecast downwards to c 90p. The rest of the brokers will follow. Rightly or wrongly thats what is happening unfortunatley.

What is fustrating is that this does not have to have been so....

Unfortunate.

The sooner the chairman leaves the better

The sooner a CFO joins the better

Drew simply left certain things too long now the price is being paid

[myshareinfo] 04/9/2018 12:38

This is my analysis of the article in FT from Dan.

The article summarizes that the iqe valuation is mad even at this price. The reasons are

1. IQE is not a direct supplier to apple.

We know this anyway. A wafer can't be used in a product directly anyway. "IQE provides wafers to apple" is a fact which holds good today.
A big company like apple whose major revenue is from iphones always looks out for multiple sources as part of their strategy.
Finsar added to the list should be seen as good news provoided the VCSELS are extended to other models (tabs, other phones. Ofcourse in future).
Did we see any loss of revenue from apple reported by IQE in the 2nd half expectations? No. So we are definitely good.
Next Recent results update from the company mentioned clearly, apple wafer demand is seasonal and is ramped in 2nd half.
Rest of the wafer sales are more or less stable to last year.
Yes IQE is affected by margins but that is due to some other qualification programs (which are inevitable. Volumes come after this)

2. Revenue from apple 23 million pounds out of 155 million. And 30% of increased sales attributed to currency fluctuations.

That is only 14% of revenue from apple. This is a good news as it relies less on apple.
There has been at the max 13 % currency fluctuation b/w USD to GBP. This does add up to the 30% claim in the mentioned article.
Moreover its difficult to get to know the conversion rate actually used by IQE, it could be at the peak or trough.

3. (Quote from the article) The company said the reason was inventory the very successful and aggressive first mass ramp was still hanging around in the supply chain.

I am not sure the company mentioned this. What is mentioned by company as I remember is that there was an added expenses incurred due to replenishment of its own inventories.

4. Winsemi weak guidance and interpretation of brokers.

The later one should be ignored as we know how accurate their predictions are.
A company can have weak guidance for multiple reasons. All I know is that both IQE (below) and AMS (above) Win Semi in supply chain issued guidance which is much better than previous years.

I think the reactor switching costs between wireless and photonics are dependent on number of reactors used. If this number is unchanged to 2017, one should expect the costs remain same despite zero growth in wireless revenue. Don't see the logic here.

0.9 Million expense is for various activities like increase human resources etc etc. Wouldn't capitalisation need a fixed asset to be on the book?

In my view, it would have been good if the article writer mentioned what is the fair price in his view and why.
Increase in investments is one sign of growth to come. All the new reactors, human resources etc etc is a sign I believe that revenues will grow. However I am hopefull the profits will rise due to the new complete solutions (FEM's, full epitaxy etc etc.)

This is just my opinion. Feel free to point any issues in the analysis.

[jimboyce] 04/9/2018 12:35

So how or why were Institutions paying £1.40 last year?

[cannyshoveyergrannyoffthebus] 04/9/2018 12:19

Edison reseach note looks like 91.6 p includes their growth forecast . Someone wants this in the low 90's.

[chessmaster10] 04/9/2018 11:54

Richard, I remain supportive of the company, but a concern for me from the recent update is just how much spending / investment is needed to stay ahead, it seems like a continuous flow.

Ultimately this spending eats into the bottom line, which is all many investors are interested in, and that may be the key point the shorters are playing on.

Main example from the latest update is the £21m for facilities in the US and Taiwan. Although I can see the strategic long-term benefit, its another new expense to be accounted for, which I for one wasn't anticipating.

At what point will the company be able to reduce its spending sufficiently to allow cash and profits to grow in a meaningful way? That's the key point for me.


Also, a smaller point, but hopefully a new CFO could tidy up the financial statements a bit. The last update has mis-aligned text and is generally messy with the number of adjusments / re-statements / notes... I know some can't be avoided, but I prefer financial statements to be as clean and clear as possible.

[richardc77] 04/9/2018 10:54

Do your own research, understand the value, see the future and then stick to your guns, unless you later discover something that makes you change your mind.

I have seen nothing untoward only a short term pause and white noise from others.

[doc1975] 04/9/2018 10:24

Richardc - sounds like it’s a load of chancers. I used to think these city boys were on the pulse. Then I asked my broker to meet for a beer. I couldn’t believe it when he started slagging off Warren Buffet as being past it and an idiot for buying Sante Fe Burlington railway company ( can’t recall if it was that exact name). Then he said Apple was way overvalued so I had £100 bet with him that Apple would be up by over 20% within a year. He lost. What I realised then was the man in the mirror is the only one accountable for my money/decisions/investments. Hence why it frustrates me about these complainers. In the end quality comes through if we have bought the right company. I think we have.

[horneblower] 04/9/2018 09:41

squire, so, it's a good insulator (heat?) but, unfortunately, a good conductor (electrical).

[richardc77] 04/9/2018 09:30

In an old life when I used to work I was employed as an analyst, I had way too much to cover to do a half decent job, and most of the guys I worked with stuck their fingers in the air...I doubt these guys are any different. Copy paste without even spell checking often...

[squire007] 04/9/2018 09:18

It is a good insulator .

[sheep_herder] 04/9/2018 09:03

This is an interesting article about a new technology to the data center. If this catches on it would be a big boost to the number of optical transceivers installed per rack.

[knackers] 04/9/2018 08:59

Enough of the apple sauce - this price action is doing my plums!

[richardc77] 04/9/2018 08:41

Mad, good to hear 👏 just sounded like a goodbye post to me.

[horneblower] 04/9/2018 08:39

It seems to me that the problem with graphene is one of the very things its proponents shout about - the fact that it is a very good electrical conductor.
Now if it was a good insulator, that WOULD make it something to shout about.

[mad foetus] 04/9/2018 08:37

Richard, I still have a few, enough to keep it on the monitor and I will buy more I am sure when the trend is clearly up.