Seeing Machines Share Discussion Threads

[lfc4ever] 13/8/2021 16:40

12 on the offer. I'll take that!

[base7] 13/8/2021 16:25

An upgrade from Cenkos(our underworked & overpaid broker) following the unusually bullish tone from PM would be helpful in re rating our share price in order to establish a higher trading range such that in the event of a cheeky early bid at least the starting point will be higher than it is now

[blackpudding13] 13/8/2021 15:15

12p has always been a tough nut to crack, i think if the pressure stays on maybe next week, it took a while to clear out the 10's too, but hopefully once 12 is gone it could sharply rise and with some of the news thats expected, well.....

[hazl] 13/8/2021 14:45

This is the important announcement.
This changes everything,in my opinion.



Bipartisan Senate legislation includes lifesaving automotive technology provisions

New agreement would require Driver Monitoring Systems to stop distracted and drunk driving

Canberra, Australia - Today the U.S. Senate passed a bipartisan infrastructure agreement which contains key provisions to improve automotive safety. Specifically, the legislation includes the SAFE Act, introduced by Senators Markey, Blumenthal, and Klobuchar, which would require Driver Monitoring Systems (DMS) to detect distracted driving.

In addition, the legislation includes the RIDE Act, which was sponsored by Senators Rick Scott and Ben Ray Lujan which would require new cars to use advanced drunk driving technology to stop impaired driving.

"DMS is on the road today in systems like General Motor's Super Cruise(TM) and can tell whether the driver is engaged in the driving task or is distracted," said Seeing Machines CEO Paul McGlone. "If the driver is distracted, driver monitoring systems have the ability to warn the driver and save lives."

The safety provisions would require the National Highway Traffic Administration (NHTSA) to carefully research DMS systems and begin the rulemaking process to regulate this technology.

This legislation comes at a critical time in the United States. Early estimates from NHTSA point to a 9% increase in traffic deaths in 2020. In 2019, 3,142 people were killed due to distracted driving, 10,142 people died by alcohol impaired driving, and 697 people were killed by drowsy driving. DMS has the potential to reduce or eliminate all of these crashes.

"Seeing Machines is pleased to see this progress on automotive safety," said McGlone. "We look forward to continuing to work with the U.S. Congress and NHTSA to ensure these technologies are available to all drivers and save the maximum number of lives."

[mirabeau] 13/8/2021 11:38

This is looking pretty strong now.

[juju44] 13/8/2021 11:30

I bought a load of these years ago around 4p . It was too soon but looks like it could come good now so I have added today

[gutterhead] 13/8/2021 11:20

That would be good, a real Brucie bonus.....above 11p is the important one

[lfc4ever] 13/8/2021 10:36

going to stick my neck out and say we will finish about 12p today.

[baggariddim] 13/8/2021 09:26

You deserve a decent return fella.Your faith and research kept me going here for a long time and eventually a decent profit ?

[mirabeau] 13/8/2021 09:00

hazl

cheers, let's hope all holders profit handsomely including Ken who I suspect still has an equity interest in SEE

[hazl] 13/8/2021 08:24

I believe 5G is going to make a lot of difference.


'With Industrial 5G, we can unleash the power of mobile robots in production, autonomous vehicles in logistics, IIoT, augmented reality for maintenance, and more.

Explore @Siemens
' #Industrial5G > @siemensindustry
via @antgrasso
#SiemensInfluencer #5G '

[hazl] 13/8/2021 08:06

Well very best of luck to you Mirabeau and the rest of us in effect!

[mirabeau] 12/8/2021 19:13

hazl

I bought some more last week fella. Holding 425k now. Not as much as I'd like but enuff.

I've been in and out of SEE more times since 2013 than I care to remember but I am now convinced that the company is genuinely on the cusp (months not years as was the case in 2013-2019) of delivering on its potential

gla

[tarrant77] 12/8/2021 19:08

Killik are serious and well respected investors and their very positive statements about the company earlier today are most encouraging and MAY help to push the price towards 14/15p quite quickly. If (and I'm not holding my breath) the company can, and are allowed by customers, follow up in reasonably early course and confirm that one or two RFQ's have been won, I am quite certain that the share price will start to break new ground.Fingers crossed.

[hazl] 12/8/2021 19:01

It was the Qualcomm connection ,that made me buy more Mirabeau.

I mean - Qualcomm!

[mirabeau] 12/8/2021 18:30

Seeing Machines (11.0p) - our largest holding but also the one with the highest conviction too….

Published on August 12, 2021

Partner, Head of Special Situations at Killik & Co

Following the share price spike over the last week, Seeing Machines is once again the largest holding across client portfolios in the Killik Special Situations service; although we may have the same number of company holdings as in a unitised fund (we currently have c.60), one major advantage of having a segregated discretionary service mandate is that we can finesse the timing of stock purchases for individual clients on the basis that not all of our 60 names are “screaming buys” all the time, a feature that is implicit in a unitised fund manager’s likely investment of new monies in one fell swoop. Interestingly, our highest conviction buy just now (Seeing Machines) is also the largest holding in our service; these two variables don’t necessarily align! We have been invested in the company since 2017 and helped finance the company through several funding rounds. Despite having issues in parts of the business unrelated to the key area of our interest (the automotive OEM Division), then delays to RFQs in the wake of the pandemic, we believe the company really is now at an inflection point. I have asked my outstanding wingman, Peter Bate, to summarise the investment case as below.

Background

Seeing Machines recently released its FY21 trading update for the year ended 30 June 2021. Whilst the statement was relatively brief, we believe it is one of the most significant statements its management has made in some time – with the key feature being the marked increase in the number of Tier-1 relationships (key suppliers to the automotive OEMs and therefore crucial industry gatekeepers) and the quantification of the significant increase in the current RFQ pipeline (to A$900m+). To us this confirms that DMS is now an immediate term issue for OEMs as they are being squeezed between the time it takes to design in such technology (c.18 months) and the regulatory timetables for implementation (from 2022-2024).

As a reminder, Seeing Machines is a provider of semiconductor IP used in automotive safety applications. In a nutshell, the company has taken 20 years of research and 7bn km+ worth of video footage of the human face when driving. They have then trained an AI system using this data so that the system knows what it looks like just before someone falls asleep, or for example, is looking at their mobile phone rather than driving. This technology has been packaged into what is known as a Driver Monitoring System (DMS) and is currently deployed by Seeing Machines into both fleet customers (in an aftermarket capacity) as well as into passenger car applications, where it has been installed on more than 100,000 passenger cars to date. Seeing Machines is one of two key vendors of DMS systems, the other one being Smart Eye (based in Sweden). We believe the DMS industry will effectively remain as a duopoly for the aforementioned reasons of time to deploy the technology and impending regulatory deadlines i.e. there is simply not time for a new scale player to enter the market and become appropriately qualified.

The key drivers to adoption here are legislative: from 2022, all cars with certain autonomous driving capabilities sold in the EU must have an integrated driver monitoring system (or from 2024 for all new models). The reasons behind this are quite obvious - the car needs to know that the driver is paying attention on the road ahead and it is safe to hand back control to the driver when the automated driving features are deactivated or the road becomes inappropriate for the autonomous driving. These automated driving features have proven very popular with consumers and we believe more than offset earlier (but unwarranted we believe) privacy concerns surrounding DMS. Similar legislation in the US targeting a 2024 implementation date was recently passed in the House of Representatives, but has yet to pass the Senate. In recent days however we have seen key provisions within the US Infrastructure Bill that seek to improve automotive safety – with a specific focus on using technology to detect drunk and distracted drivers – DMS is the obvious enabling tool we believe. Beyond the legal “stick”, we expect the consumer demand “carrot” to come from Euro NCAP, the care safety standard body that is closely followed by consumers. It is anticipated that from 2023 cars will need to have a DMS in order to achieve the coveted 5* rating.

Seeing Machines currently has five production vehicles across three OEMs, which is expected to grow to 30 separate models across the next two calendar years. Behind this, the company has its c. A$900m RFQ pipeline, supporting the longer-term roadmap and providing scope for shorter term contract win announcements. The company will not confirm its customers (apart from GM & Mercedes-Benz); however, we believe the other OEMs include BMW, Fiat Chrysler and Ford. We believe that the current production vehicles include the Cadillac Escalade, Cadillac CT5, Ford Mustang Mach-E, Ford F150 pickup truck, the Mercedes Benz S Class and Mercedes Benz EQS. Aside from the revenue growth that will come as these first material OEMs come on stream, it is important to note that the margin profile of this division will transform from non-recurring engineering revenue towards high margin royalty revenue.

As a loss-making semiconductor IP business whose product sales are immature (but the technology is definitely not), the company is not easy to value. The bulk of revenue at the group is currently generated from its Aftermarket Division which, as it sounds, provides aftermarket DMS boxes into commercial fleet vehicles (approaching 32,000 vehicles). Whilst this division may not have the inherent scalability of the OEM side, it is now profitable as a standalone unit, with revenues this year of c.A$38m, a significant proportion of which is recurring. Crucially, this division also generates significant volumes of data that feeds the AI to offer continuous improvement to the groups algorithms – and as such offers significant differentiation over peers. This is the data that has built the company and has significant strategic value to the industry. The c.7bn+ kilometres of captured driver reactions (what ultimately trains the AI) being effectively impossible for anyone else to synthesise over the three years before the significant ramp up in regulatory requirements for DMS.

In valuing the Automotive Division, we must consider the earnings power of this division when DMS hits the mainstream, which we assume will be in or just before 2024 (when key EU and hopefully US regulations kick in). Given our assumption that the Seeing Machines is able to secure 50% of the overall market (i.e. 15m. cars per annum across Europe and the US), this could imply just over £100m. in high margin royalty revenue potential. Although the company is still loss -making, it has a strong balance sheet, with A$47.7m of net cash as at 30 June 2021. We believe it is on target to be cash flow neutral in FY23, and accordingly, think it is now fully funded through to profitability.

We believe the key share price catalysts from here will include the conversion of the aforementioned RFQ pipeline into new OEM wins; we would particularly look out for any of the Japanese OEMs as the group has yet to make headway in the region (we believe) yet, as well as any progress with the Volkswagen Group. Another angle could be M&A activity. Recent times have seen consolidation in adjacent parts of the industry – with peer Smart Eye taking over Affectiva (AI designed to interpret human emotions) in May 2021 for $73.5m (there are no earnings/revenue metrics available for Affectiva). In the last few days we have also seen a bidding war commence for automotive technology company (and Seeing Machines integrator) Veoneer, a Tier-1 integration partner to Seeing Machines. In July, Veoneer (NYSE-listed) was initially in receipt of a takeover bid from Magna (another Tier-1 which we also believe works with Seeing Machines) for $4.6bn. Subsequently, on 5th August, Qualcomm (the largest fabless semiconductor manufacturer in the world and also a Seeing Machines partner) announced a counter-offer for Veoneer, at an 18% premium to the Magna offer.

Veoneer and Qualcomm have an existing partnership. Indeed Veoneer software was one of the three pre-selected software stacks chosen by Qualcomm as part of its new Snapdragon Ride SoC announced in January 2021. Intriguingly, Seeing Machines’ DMS was one of the other three pre-selected software stacks (the final being a parking automation product from Valeo). We believe the takeover of Seeing Machines by Qualcomm would ultimately be highly logical, capturing for the latter high value IP based upon large datasets that cannot be synthesised quickly – just as the technology has proven to be mainstream and its adoption is growing.

end

[mirabeau] 12/8/2021 18:02

Seeing Machines (11.0p) - our largest holding but also the one with the highest conviction too….

Published on August 12, 2021

Partner, Head of Special Situations at Killik & Co

Following the share price spike over the last week, Seeing Machines is once again the largest holding across client portfolios in the Killik Special Situations service; although we may have the same number of company holdings as in a unitised fund (we currently have c.60), one major advantage of having a segregated discretionary service mandate is that we can finesse the timing of stock purchases for individual clients on the basis that not all of our 60 names are “screaming buys” all the time, a feature that is implicit in a unitised fund manager’s likely investment of new monies in one fell swoop. Interestingly, our highest conviction buy just now (Seeing Machines) is also the largest holding in our service; these two variables don’t necessarily align! We have been invested in the company since 2017 and helped finance the company through several funding rounds. Despite having issues in parts of the business unrelated to the key area of our interest (the automotive OEM Division), then delays to RFQs in the wake of the pandemic, we believe the company really is now at an inflection point. I have asked my outstanding wingman, Peter Bate, to summarise the investment case as below.

Background

Seeing Machines recently released its FY21 trading update for the year ended 30 June 2021. Whilst the statement was relatively brief, we believe it is one of the most significant statements its management has made in some time – with the key feature being the marked increase in the number of Tier-1 relationships (key suppliers to the automotive OEMs and therefore crucial industry gatekeepers) and the quantification of the significant increase in the current RFQ pipeline (to A$900m+). To us this confirms that DMS is now an immediate term issue for OEMs as they are being squeezed between the time it takes to design in such technology (c.18 months) and the regulatory timetables for implementation (from 2022-2024).

As a reminder, Seeing Machines is a provider of semiconductor IP used in automotive safety applications. In a nutshell, the company has taken 20 years of research and 7bn km+ worth of video footage of the human face when driving. They have then trained an AI system using this data so that the system knows what it looks like just before someone falls asleep, or for example, is looking at their mobile phone rather than driving. This technology has been packaged into what is known as a Driver Monitoring System (DMS) and is currently deployed by Seeing Machines into both fleet customers (in an aftermarket capacity) as well as into passenger car applications, where it has been installed on more than 100,000 passenger cars to date. Seeing Machines is one of two key vendors of DMS systems, the other one being Smart Eye (based in Sweden). We believe the DMS industry will effectively remain as a duopoly for the aforementioned reasons of time to deploy the technology and impending regulatory deadlines i.e. there is simply not time for a new scale player to enter the market and become appropriately qualified.

The key drivers to adoption here are legislative: from 2022, all cars with certain autonomous driving capabilities sold in the EU must have an integrated driver monitoring system (or from 2024 for all new models). The reasons behind this are quite obvious - the car needs to know that the driver is paying attention on the road ahead and it is safe to hand back control to the driver when the automated driving features are deactivated or the road becomes inappropriate for the autonomous driving. These automated driving features have proven very popular with consumers and we believe more than offset earlier (but unwarranted we believe) privacy concerns surrounding DMS. Similar legislation in the US targeting a 2024 implementation date was recently passed in the House of Representatives, but has yet to pass the Senate. In recent days however we have seen key provisions within the US Infrastructure Bill that seek to improve automotive safety – with a specific focus on using technology to detect drunk and distracted drivers – DMS is the obvious enabling tool we believe. Beyond the legal “stick”, we expect the consumer demand “carrot” to come from Euro NCAP, the care safety standard body that is closely followed by consumers. It is anticipated that from 2023 cars will need to have a DMS in order to achieve the coveted 5* rating.

Seeing Machines currently has five production vehicles across three OEMs, which is expected to grow to 30 separate models across the next two calendar years. Behind this, the company has its c. A$900m RFQ pipeline, supporting the longer-term roadmap and providing scope for shorter term contract win announcements. The company will not confirm its customers (apart from GM & Mercedes-Benz); however, we believe the other OEMs include BMW, Fiat Chrysler and Ford. We believe that the current production vehicles include the Cadillac Escalade, Cadillac CT5, Ford Mustang Mach-E, Ford F150 pickup truck, the Mercedes Benz S Class and Mercedes Benz EQS. Aside from the revenue growth that will come as these first material OEMs come on stream, it is important to note that the margin profile of this division will transform from non-recurring engineering revenue towards high margin royalty revenue.

As a loss-making semiconductor IP business whose product sales are immature (but the technology is definitely not), the company is not easy to value. The bulk of revenue at the group is currently generated from its Aftermarket Division which, as it sounds, provides aftermarket DMS boxes into commercial fleet vehicles (approaching 32,000 vehicles). Whilst this division may not have the inherent scalability of the OEM side, it is now profitable as a standalone unit, with revenues this year of c.A$38m, a significant proportion of which is recurring. Crucially, this division also generates significant volumes of data that feeds the AI to offer continuous improvement to the groups algorithms – and as such offers significant differentiation over peers. This is the data that has built the company and has significant strategic value to the industry. The c.7bn+ kilometres of captured driver reactions (what ultimately trains the AI) being effectively impossible for anyone else to synthesise over the three years before the significant ramp up in regulatory requirements for DMS.

In valuing the Automotive Division, we must consider the earnings power of this division when DMS hits the mainstream, which we assume will be in or just before 2024 (when key EU and hopefully US regulations kick in). Given our assumption that the Seeing Machines is able to secure 50% of the overall market (i.e. 15m. cars per annum across Europe and the US), this could imply just over £100m. in high margin royalty revenue potential. Although the company is still loss -making, it has a strong balance sheet, with A$47.7m of net cash as at 30 June 2021. We believe it is on target to be cash flow neutral in FY23, and accordingly, think it is now fully funded through to profitability.

We believe the key share price catalysts from here will include the conversion of the aforementioned RFQ pipeline into new OEM wins; we would particularly look out for any of the Japanese OEMs as the group has yet to make headway in the region (we believe) yet, as well as any progress with the Volkswagen Group. Another angle could be M&A activity. Recent times have seen consolidation in adjacent parts of the industry – with peer Smart Eye taking over Affectiva (AI designed to interpret human emotions) in May 2021 for $73.5m (there are no earnings/revenue metrics available for Affectiva). In the last few days we have also seen a bidding war commence for automotive technology company (and Seeing Machines integrator) Veoneer, a Tier-1 integration partner to Seeing Machines. In July, Veoneer (NYSE-listed) was initially in receipt of a takeover bid from Magna (another Tier-1 which we also believe works with Seeing Machines) for $4.6bn. Subsequently, on 5th August, Qualcomm (the largest fabless semiconductor manufacturer in the world and also a Seeing Machines partner) announced a counter-offer for Veoneer, at an 18% premium to the Magna offer.

Veoneer and Qualcomm have an existing partnership. Indeed Veoneer software was one of the three pre-selected software stacks chosen by Qualcomm as part of its new Snapdragon Ride SoC announced in January 2021. Intriguingly, Seeing Machines’ DMS was one of the other three pre-selected software stacks (the final being a parking automation product from Valeo). We believe the takeover of Seeing Machines by Qualcomm would ultimately be highly logical, capturing for the latter high value IP based upon large datasets that cannot be synthesised quickly – just as the technology has proven to be mainstream and its adoption is growing.

end

[hazl] 12/8/2021 17:45

That last larger trade was about 13.57
so could have been a buy.

[zero the hero] 12/8/2021 17:35

Thanks seeing2020, love Chis Menon's valuation of the company in the comment below



The lowest range of that valuation makes this a 10 bagger

[seeing2020] 12/8/2021 17:06

hxxps://www.linkedin.com/posts/michael-savage-26b02023_activity-6831583278261174272-UBnf

[base7] 12/8/2021 15:14

Momentum building nicely & lets hope that more positive news is soon released to underpin our recent recovery.

[hazl] 12/8/2021 08:10

Seeing Machines
@seeingmachines
·
21m
This morning the Department of Industry paid our Canberra offices a visit to get some behind-the-scenes footage of the Seeing Machines team in action. The footage is for our feature in Australia's national science
week

[hazl] 12/8/2021 07:23

CAGR Of almost 100% per year expected after 2025.

Exploded since November last year cars,models,using their technologies.

Much more to come this industry is taking off.

Comments from Paul in the interview.