Iqe Share Discussion Threads

[cheek212] 07/9/2018 16:51

Wellington reduced short on 5th which explains the rise in share price that day.

[richardc77] 07/9/2018 16:47

Yep read that this morning, doesn’t really tell us anything, and I doubt it will impact stated 40-60-% photonics projected 3-5yr growth.

[yankeekraut] 07/9/2018 16:36

Finisar CEO comment yesterday on Mkt. share and the competition: Question:(analyst) on 3D sensing. "Michael, any sense that you get talking with your current large customer here about your relative competitive position. Obviously, another supplier has got the number one share position, but curious if you have an understanding where you sit relative to any others that are out there or any expectations of share that you might have over the next 12 months? CEO:"I think, our advantage has been talked about, as I think there's a relationship around manufacturing in the United States and I think as we get our Sherman facility on line, we certainly expect to be in a position to take share. I think that, as maybe Alex was talking about previously, our yield has been choppy, we've got to get our execution right, we've got to this Sherman plant up and running and I think as we execute along those vectors, we naturally will be able to take share. Our share today is very, very modest as we all know, but I think we should be in a good position at the beginning of next year to begin to materially dent the current landscape in terms of shifts and share gains and then really make progress as we enter the model year of 2019".

[cotswoldsparky] 07/9/2018 16:19

46maxon,

Mine's called Satnag :-). Don't tell me they keep going for 40 years or more!!!

CS

[46maxon] 07/9/2018 15:54

I’ve had driverless car for 40 years, she sits next to me!!😭

[horneblower] 07/9/2018 15:26

I borrowed an audi courtesy car well over over a year ago that had lane control on it.
It worked very well on the motorway and steered itself nicely in the middle of the lane without wiggling around. I was rather impressed but switched it off as I prefer to drive the thing myself.

[dr_smith] 07/9/2018 15:17

I have just been watching Horizon:Dawn of the driverless car.(2017 Production).
It leaves much to be desired in terms of software being able to drive safely.
A test vehicle on a UK tarmac road with steel crash barrier to left and white line in road centre required human intervention to avoid getting too close to barrier.
Driver explained it as "latency" (delay in response to sensor data) of 0.5 seconds.
It looked like several seconds to me, and this with an empty well marked road without the miriad of objects to recognise and distract.
Project that for 60 mph and still needs to be 5 times faster - and this with no moving objects to anticipate.

OK that was 2017, but the recent Apple crash doesn't inspire confidence:
“An Apple test vehicle in autonomous mode was rear-ended while preparing to merge onto Lawrence Expressway South from Kifer Road,” the incident description reads.

“The Apple test vehicle was travelling less than 1mph waiting for a safe gap to complete the merge when a 2016 Nissan Leaf contacted the Apple test vehicle at approximately 15mph. "

It seems a lane merge is too high a risk for software, so it decided to stop.

For mass market automated car adoption timeline we have:
1) Software capability/confidence timeline
2) Cost of such cars versus what we have
3) Attitude to such cars.

Some driver aides are in cars already.
I wonder if IQE have a handle of the volume and timing of their products in the motor industry - other than "big". I guess it is the 3-5 year time band they mentioned in 2017, so 2020 to 2022.
Production ramp up would need equipment ramp up and we know from H1 results that these capital costs for future production are eating up todays earnings.

Given motor industry is a big earner, I would like to see a deal where motor industry pre-pay on order to finance IQE's tooling up. It would reduce risks and financial burden for IQE and have mutual benefit for motor trade in an assured supply.

That concept, or similar, would drastically change look of accounts and EPS in coming years, with knock on of course to share price

Maybe something for our new CFO!

IMO :-)

Dave

[davebowler] 07/9/2018 14:51

Edison;
During H118 IQE experienced double-digit sales growth on a constant currency basis in each of its three primary markets, although this was partly offset by a currency headwind. The investment in multiple VCSEL qualifications and the Newport foundry depressed margins, but underpins management’s expectations of a sustained photonics ramp-up in H218 and FY19. Acknowledging the currency headwind and one-off H118 photonics costs, we revise our estimates downwards.


As flagged in the pre-close trading update, total H118 revenues grew by 4% yearon-year to £73.4m, with the photonics segment growing by 30% in constant currency to 26% of the total. Adjusted profit before tax was depressed by several factors, falling by 21% to £7.6m. These include the currency headwind, the cost of multiple low margin VCSEL qualification programmes and the cost of staffing the new Newport facility prior to commencing production. Collectively, these one-off effects totalled £3.5m. If these costs are stripped out, adjusted profit before tax becomes £11.1m, a 14% improvement on the prior year period. Additionally, H117 benefitted from £1.0m licence revenues but there were none in H118. Net cash reduced by £5.0m during the period to £40.6m at the end of June, reflecting continued investment in multiple innovative technologies and capex for the new Newport foundry.


The recent work on VCSEL product qualifications has resulted in IQE being in mass production with eight VCSEL chip manufacturers and in final qualification stages with another four. Volumes for these programmes, which include production for Android OEMs, are already ramping up, underpinning management’s expectation of a photonics ramp-up in H218 and FY19. We adjust our estimates downwards in line with revised management guidance to reflect the currency headwind and one-off H118 photonics costs.


A comparison of IQE’s prospective P/E multiples against those of listed companies offering epitaxy for VCSELs (IntelliEPI, LandMark Optoelectronics and Visual Photonics) shows IQE trading towards the upper end of this sample. We believe this is reasonable given IQE’s strong market position. 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.

[jimboyce] 07/9/2018 14:00

Thanks. Of course you are correct. Note it says 'right of recall on demand'. So they can get them back immediately if they wish.

[garyjonesltd] 07/9/2018 13:50

And not all of the 5.56% will be SHORT, some will be LONG!!

[owenga] 07/9/2018 13:41

No, they are lending 5.5%, is the ones under financial instruments

[senor_sensible] 07/9/2018 12:26

Enismore one of the biggest shorters, they specialise in this sector with a long/short fund. Not good news imo

[jimboyce] 07/9/2018 12:11

So of the 11% shorted, 10% is being provided by TRP.I would love to know their investment strategy.

[mhassanriaz] 07/9/2018 12:04

T rowe comes back to life. RNS issued positions increased but also lending more.

[mhassanriaz] 07/9/2018 11:57

Let us not worry about the currency as far as your hitting the guidance and more importantly the market wants to know about consolidation and getting more bigger customers. As I have said earlier Numbers speak for themselves. Get those top lines fatter and hit economies of scale and thats all we need. The next stop is 5g and elec. cars.

[richardc77] 07/9/2018 11:54

True but in reality it adds up to the same thing.

[mhassanriaz] 07/9/2018 11:50

Folks lets be very clear that Apple did not invest in Finisar. They were paid from Apple's advanced manufacturing fund for Vcsels order.
Have a read and clear the misconception.

hxxp://uk.businessinsider.com/apple-didnt-invest-in-finisar-2017-12

[senor_sensible] 07/9/2018 11:48

from last results we got "IQE reported Wednesday first-half profit before tax rose sharply led by uptick in wafer sales, but performance was hurt by a strong pound.
"

Pound is strengthening again does that mean further pain to come :-(

[dr_smith] 07/9/2018 11:48

For message sending, I assume their Roadshow is currently on.
I haven't seen any comment from IQE on:
1) Who target audience is
2) Whether this a particular trade show in an exhibition hall, or a trendy name for key staff to fly round the world meeting potential clients at their own premises.
3) ..or something Chris Evans goes to (sorry..but in absence of other info, that's what I first assume for a Roadshow).

[jimboyce] 07/9/2018 11:25

We just need to send this message to the unaware masses.

[richardc77] 07/9/2018 11:09

That’s a question for Drew...

[jamesrowe] 07/9/2018 10:29

Would there be advantage to IQE to try to licence their 6" manufacturing know how to Finisar so that IQE would get royalties from them in the long term, possibly at the expense of some short term profit (or perhaps not if a license fee was involved!)?? Finisar is not going to go away as Apple will want a second source of supply so it would seem to be beneficial to make the best of it and try to get some revenue from them....

[richardc77] 07/9/2018 10:24

Jim Boyce, I agree the market perceives this, but I think if you look at the market volume of 6" VCSEL' needed over the next 3-5 years, IQE will still be on a ramp, and I don't think Finisar eventually joining the fray will have an impact on their 40-60% photonics 3-5yr growth rate, because the market is going to be huge. Re Apple yes we seem to be tied to them, however IQE is not an IMG, as the breadth of customers is much larger and we do not supply Apple directly. The plus side of being tied to Apple should mean that the share price and company get some support with the Sept 12th reveal of extra iPhones (hopefully at cheaper pricing) with FACE ID. I'm not sure when the new iPad Pro will be revealed but would expect to see FACE ID in that too.

If you sit back and think about 3D sensing, it is not hard to imagine staggering numbers of IOT tech things, consumer electronics such as TVs etc having 3D sensing. Not all of these bits of hardware even need to have a screen, although TOUCH ID requires some kind of screen FACE ID does not, which I suspect is another reason why it will end up everywhere.

Of course IQE is not just about these 6" VCSEL'...

[jimboyce] 07/9/2018 10:07

I believe that there is a perception generally by many (hopefully not on this BB) that IQE is reliant on Apple, and also that with Apple investing millions in Fin that perhaps Apple will pull out of IQE when Fin is up and running sometime in the next year or two.However the reality is that IQE is presently engaging with many of the worlds leading OEM's and even if Apple do pull out in the future, there will be many other customers that will be reliant on IQE's offerings.The general market will see this threat and price the shares accordingly. When it becomes clear to the market that IQE has new large continuing contracts, I believe the uncertainty holding it back will disappear and the share will blossom and ultimately this will be reflected in the valuation.