 Paul has given countless excuses for the delays winning new contracts. Let's be clear I'm only calling out things he said would happen or target dates / expectations they communicated to investors.
The last time he made excuses about the delayed new contracts he said the oems were rethinking their approach to their decisions because of OMS, but said he expected that the new contracts would therefore be bigger and better. The fist half on 2024 was going to be very busy with new contracts. The reality is nothing has happened and instead of sales being for high level dms the oems are going for low level dms which has impacted the margin mix.
On Gen 3. GSR came in a week ago and not a single news worthy rns or piece of PR to coincide with this regulatory trigger. Why is that? It's obviously because no one wants it until they have to. They'd rather use torque type sensors than Gen 3.
Yes we know camera based dms regulations are coming, but so is the competition. Finding out this week that Valeo were developing their own dms and had 3 contracts in the bag didn't surprise me. I'm pretty sure other are too.
I don't track each oem in regards to dms, but there seems to be quite alot of 'missing' oems. So who is supplying them?
The price targets from Peel Hunt are very depressing given the years I've been invested in this company. |
Peel Hunt confirms Seeing Machines could capture 70 per cent auto market share
12th July 2024
Peel Hunt confirms Seeing Machines could capture 70 per cent of the global auto market and proffers a 16p bull case target price, while reiterating its current 9p price target.
In an interesting note issued today, Peel Hunt analysts have clarified their thoughts regarding Seeing Machines, stating it is the leading company in the Driver Monitoring (DMS) space with the opportunity to capture around 70 per cent of the 90-100m cars sold globally each year.
In the note, its team of analysts Oliver Tipping, Damindu Jayaweera and James Lockyer, stated: “We believe Seeing Machines has a medium-term opportunity to sell Driver Monitoring Systems (DMS) to c.70% of the 90-100m cars sold p.a., equating to a c.US$650m/year market.”
They added: “By dissecting competitors’ KPIs, we conclude that Seeing Machines already has a leading position ahead of the market inflection.”
Of course it’s well-known that the EU General Safety Regulation (GSR), provides a layer of certainty as it mandates DMS in all cars by July 2026.
Moreover, from January 2026 the Euro NCAP 2026 protocols will require advanced, camera-based DMS if passenger cars are to achieve a 5 star rating. Given production lead times, I personally believe that means leading OEMs need to lock in this technology now for delivery by then.
Bull/Bear case
Peel Hunt explained its bull/bear case scenarios for Seeing Machines. Its bull case target price is 16p. Its bear case target price is 3.5p.
“Our bull case assumes Seeing Machines can win in the Chinese market. This sees cars on the road ramp to c.25m units. This is still lower than the 30m+ rear view mirrors Gentex ships p.a., so it is not an unreasonable number for a key player in the Automotive market.
Our bear case assumes that Seeing Machines only ever wins a 15% of its Total Addressable Market, equating to 10m cars on the road p.a. and that the ramp happens slower in the short term. We forecast a 46% growth rate for FY26E, vs 100% growth in our base case. A delay in adoption, and increased competition, especially in the rear-view mirror market, that leads to a lower market share are the two key risks.”
It should be borne in mind that even this valuation doesn’t fully reflect the huge growth that Gen 3 Guardian is likely to deliver in the current financial year. In my opinion, with contracts ranging from the tens of thousands to hundreds of thousands of units likely to be won by Seeing Machines there is ample scope for upgrades to every broker’s target price.
In addition, Aviation will provide further upside when Collins delivers its finished its AI-powered eye-tracking product for use in aeroplanes, in collaboration with Seeing Machines.
Of course, do you own research and don’t rely on the views of any single source before investing. |
I hope you are right, but they are relying on and being effectively bailed out by several one off payments. This one with catapiller is a one off payment and cannot be repeated for 5 years. It should also be noted that they need to develop a new product out of that $16.5 million so it's difficult to assess how much of that upfront royalty payment drops to the bottom line.
So we've had the money and it will be spent in no time at all.
Who remembers the town hall when Paul said effectively what would they do with any more money after the Magna CLN? They need it now profitability has been pushed out again.
Magna are going to want their money back in just over 2 years time, but in 12 months time they can call time on their relationship with SEE.
Only this week we have discovered that one of out tier 1 customers were developing their own DMS and winning contracts. They were probably reverse engineering our product to make theirs. Magna are probably doing exactly the same. |
nvhitd you've got to start looking at the bigger picture here. Cash is king (expect more from Magna) until we see a sharp acceleration in revenue later part of 2025. I don't if you are short of SEE or just an angry investor. Colin Barnden I think sums up the recent deal quite well.
Valeo has announced a strategic collaboration with Seeing Machines to grow market share in automotive #driver and #occupant #monitoring. As part of the agreement Valeo will transfer its driver monitoring perception software via Seeing Machines’ acquisition of Asaphus Vision GmbH. This collaboration reinforces the growing realization that #DMS is exceptionally hard to do well and that, like #ADAS, only a handful of suppliers will be commercially successful in the long term. #Incabin monitoring is about seeing and understanding human behavior, not procuring cheap software that only barely meets regulatory requirements. The acquisition of Asaphus is partly a tidying-up exercise of the DMS IP across the parties, but the main conclusion is simple: Like Magna International, Valeo is now all-in with Seeing Machines on DMS.
The development is about the future for Smart Safety 360, which Valeo still talks surprisingly little about, but I described as a "game changer." (Link: hxxps://lnkd.in/eDuuP8Kc) Valeo has a record of integrating technology from third parties, the most notable of which was Mobileye. Last November Valeo produced its 20 millionth ADAS front camera system integrating Mobileye #EyeQ, just 12 months after passing 10 million. Valeo will do with Seeing Machines in DMS what it has done with Mobileye in ADAS: Ship to global OEMs in high volumes.
Seeing Machines has been clear DMS technology leader for years, but the volume leader from 2018-2022 was Smart Eye. However as discussed (link: hxxps://lnkd.in/enhwtBDd) Seeing Machines became both technology and market leader in 2023 and holds the momentum in 2024.
Seeing Machines and Smart Eye are now pursing very different strategies. Seeing Machines is firmly committed to the role of a tier-2 (T-2), leveraging strategic partnerships with Magna and now Valeo as T-1s. In comparison Smart Eye is pursuing the role of "software T-1" where it bypasses a traditional T-1 and works directly with an #OEM to integrate its software. Tobii has expressed plans to do the same. Interestingly both Smart Eye and Tobii are working with Bosch, which looks ever more like a T-1 intending to replace the DMS T-2s and develop the cabin software in-house, as it did for ADAS.
While Europe gets all the attention for DMS, the fastest growing market is forecast to be China, for compliance with C-NCAP and GBT requirements. Both Magna and Valeo have DMS solutions ready to ship and settled T-1/T-2 collaborations. The next couple of years are set to be very exciting as DMS volumes in China ramp up. |
I suggest everyone watches and listens very carefully to the Proactive Investor interview.
At 5.20. Caterpillar. Single one off payment for upfront royalties of $16.5 million. No mention of a license fee. However, in the RNS they call it a license fee and do not mention royalties at all. On first reading the RNS one could be forgiven for assuming the $16.5 million was just a licence fee and we would then benefit from the ongoing royalties on the future sales just like the first agreement allowed.
In the interview he doesn't mention a license fee and ongoing royalties. Just a one off upfront payment to cover 5 years of royalties. The reality is they have been forced into this less valuable deal in an attempt to to try and meet their profitability target. However, it's clear that the change in margin mix in auto, the lost sales, the delays introducing Gen 3 and the fact that no one wants Gen 3 until they have to will cause profitability to be pushed back. Rationale people call this a profit warning.
Again at 6.47 where he discusses timing and margin mix flipping to low level ncap compliant products from the high level products.
Then later he discusses the affect Gen 3 introduction is having on profitability. Again delays with the introduction of Gen 3 which means they are selling Gen 2 which has lower margins.
It can't be a lie to point out what is there to see and hear factually. |
Today's Proactive investors interview is very revealing. A profit warning and confirmation that the deal with Catapiller was for the upfront payment of royalties and not a licence fee plus royalties as it was previously.
He also confirmed that OEM's are choosing low cost low spec versions of dms which is lower margins.
He's proving to be a deceitful failure of a CEO. |
Thanks nvhltd, I'm now looking forward to the c300% share price rise you talk of :) |
Magna is strategic partner with SEE, not some vulture private equity company. It has an important license to renew next year with SEE. There maybe an automatic conversion at the end of 2026? All I know the loan note is pocket money to Magna and I'm sure it's not having sleepless nights about a 11p conv price |
As fo4 the Magna CLN. They are not going to accept shares at 11p if the real share price is 4p. They'll want cash. The share price has to rise by circa 300% in 2 years if we're to hope they convert to shares rather than want cash. |
Why do some people claim today's deal is good? Until this morning I'd bet no one had ever heard of Asaphus and didn't know it was a company in competition with SEE working on 3 deals we weren't. People claim without any knowledge that the price paid must be a good deal because we're paying half of what Valeo valued the business 12 months ago. FFS we were valued much higher when the share price was 12p. Their value like ours has tanked because all DMS companies have failed to deliver.
Even Peelhunt have downgraded our share price target again.
I fear for the share price over the next few months. It's already on the floor and any further bad news is going to put even more downward pressure on the share price
The reality is Paul has continued where Ken left off by making wild claims and predictions, but delivering very little. |
Ok 2XS as we are both coming from this in different directions I was perhaps over zealous. Come Oct 2026 Magna could just not convert, but highly unlikely, as the whole point of the convertible was to get an equity position, otherwise it would have gone for a straight loan secured. Anyway its over 2 years away, by which time hopefully the price will be 11p+, as the outcome and key players of DMS etc will be very transparent by then. |
So 2XS, how do you think unsecure convertible loan notes works? From what I know from the the company, it would have to breach one of he condition ie takeover, dilution via an equity raise. SEE has been very transparent about it |
This is incorrect and not how convertibles work. If you are unsure then check with SEE's CFO and he will confirm. |
For nvhtd and ss2 directly taken from SEE's audited accounts- Unsecured Convertible notes. On 4October 2022, Seeing Machines received funding of US$47,500,000 from Magna International in the form of a non-transferable 4-year convertible note maturing in October 2026 (the “Convertible Note”). The Convertible Note can be drawn down in two tranches across the 4-year term. The Convertible Note has an all-in yield of 8%, inclusive of fees. The Convertible Note contains standard covenants, and anti-dilution provisions. The interest due at the end of the facility can be paid in cash or converted into equity at Seeing Machines' election. The first tranche of US$30,000,000, was drawn on 5 October 2022 and the second tranche of US$17,500,000 was drawn down on 27 June 2023. The liability portion of tranche 1 and 2 are valued at amortised cost in accordance with AASB 9Financial Instruments (“AASB 9”) and have effective interest rates of 13.03% and 10.03% respectively. Magna may elect to convert the principal and at Seeing Machines’ election, interest outstanding under the Convertible Note at any time during its term, up to a maximum of 349,650,350 shares which, when added to Magna’s existing shareholding in the Company, will represent approximately 9.9% of the fully diluted share capital of the Company. The conversion will be at a price of 11 British pence per share. THESE NOTES ARE UNSECURED AND CONVERTIBLE meaning the investor does not have a claim on any company assets if the loan is not paid back and thus has no choice but to convert if they want to protect its investment.
As for todays announcement my take. SEE have gained some IP (why would Valeo continue on their own, when SEE has better IP); gained an excellent partnership/collaboration with a leading Tier 1; an established presence (office) in EU and a couple of clts. For the amount of business this deal is likely to make, I think a down payment of US1m and US1m in a years time looks good. The US4m on meeting certain business outcomes (ie awarded biz from Veleo and acquired IP being sound ) and in 5yrs time a possible further US4m (If all goes to plan worth paying) I can imagine Valeo has spent considerably more than this on Asaphus. Sensible deal IMHO |
You just know this is heading further down, and I'm a holder |
And down goes the price...... 🙄 |
This technology is the future and will certainly be required for all commercial vehicles one day.
SEE now working with big players in Magna , Valeo and Caterpillar .... and remember also Collins in aerospace.
Revenue and cash to equal or exceed expectations too.
Its like a snowball, rolling and slowly getting bigger and bigger. Profitability will be the last phase of a new tech but it will come.
I'm sure that the above 11p will be exceeded before too long.
Its certainly not going bust ..... so i'm slowly building a good stake. |
Great acquisition with little cash outflow & consolidating our relationship with Valeo-another industry major.
our initial 3 year deal with Magna expires on 30/6/25 & discussions may well be underway about an extension to that deal-which could include Magna writing off some of the loan or amending the terms in a mutually beneficial way.The VW deal alone justifies that relationship as once all of their 7.5mill (currently) annual prodiction includes our DMS/OMS they will be generating substantial profits-as will our good selves. |
Magna and now Valeo .... and a $16m upfront payment from Caterpillar ... the industry certainly wants this technology. More positive news.
I'm very bullish on this. |
Exactly right re tye CLN. Time is becoming a factor and the cln will become a drag on the share price unless they can demonstrate growth and to drive the share price higher.
Also this deal announced today only goes to prove that there's competition working under the radar to take market share away from us. This company was already working with oem's in Europe and China.
The larger more well know dms suppliers are not being open about the competition.
GSR kicked in yesterday and there's no new contracts off the back of it. The time has come for an explanation from the company about the 'missing' oem's and why GSR hasn't seen an explosion of new contracts both in auto and fleet. |
No you have read it correctly. It is their option whether to accept cash or shares for the principal amount. Clearly if the share price is significantly below 11p they will demand cash. |
Strange acquisition. Odd that after the hundreds of millions developing the product they still need to go elsewhere for further development. I thought it was an oven ready product. Anyway should be positive. |
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