Seeing Machines Share Discussion Threads

[ali47fish] 27/12/2023 07:23

Seeing Machines shares 'highly attractive', says US investment bank
Published: 14:04 20 Dec 2023 GMT

Seeing Machines Ltd -
Shares in Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) were marked higher in the wake of its 17th major automotive contract for its driver monitoring technology.

The eye-tracking specialist didn’t name the latest customer but said the lifetime value of the new business was US$30 million.

“With the impending regulatory deadlines for driver monitoring systems in the EU, it is no surprise to see an acceleration in the award of OEM contracts,” said broker Peel Hunt.

Under the bloc’s new General Safety Regulation, DMS will soon become mandatory on European roads.

To date, Seeing Machines has won business worth US$336 million, with most of that revenue due in the next five years.

“We believe it is still in the early stages of a regulatory-driven demand cycle for DMS/OMS technology,” said US investment bank Stifel in a note.

Stifel thinks the shares, up 0.1p at 5.2p, are “highly attractive for a market leader in a large industry”.

Peel Hunt’s target price is 12p.

[hope1815] 22/12/2023 18:53

I am an Investor my point of view SEE has a wide appeal to a lot of Industries. The value will come through, Smart Eye they get contracts any company does.

People may worry Smart Eye getting some contracts, just watch the trading update again on SEE. They did say they not going for the bottom of the market and the products speak for themselves.

Just a saying from an old Investor now passed away " You may blow a balloon up but at the end of the day it's just hot air" Smart Eye has done a good PR job, just remember the old Investor Quote.

[mirabeau] 22/12/2023 08:46

Many thanks to Safestocks for his/her work -



Peel Hunt note questions Smart Eye and Seeing Machines comparison

Posted on 22nd December 2023

Peet Hunt Analyst Oliver Tipping has issued a broker note on Seeing Machines that questions the contract size for Smart Eye’s recent US$150m win, while stating that Seeing Machines puts out minimum values for its wins. This is a point I made recently but, coming from Peel Hunt, it confirms it for any doubters out there.

Still, the most important point made in the note was that aside from its most recent $30m win, there are many more auto contracts expected to be announced by Seeing Machines early in the New Year. Tipping wrote: “This win was the first of the major European contracts Seeing Machines was hoping to win before the end of the year, thus its pipeline remains robust as it looks to deliver more wins in early 2024.”

The numbers game

Tipping also confirmed that Seeing Machines is very conservative regarding its contract values: “It is important to remember that the contract value Seeing Machines reports is conservatively based off minimum production volumes, which are likely to be far lower than the actual production values for these contracts.”

Then he went on to caution investors. “It is vital for investors to be aware of the differences between the numbers thrown around by different companies in the DMS market. For example, it would be easy to be distracted by the SEK 1.55bn (US$150m) figure quoted in Smart Eye’s most recent win (which we believe to be General Motors). However, we are unclear how this figure has been calculated as Smart Eye does not disclose its method for calculating the value of these contacts. In addition, this contract was as a tier 1 supplier to the OEM. Given it currently acts as a tier 2 supplier to this OEM, its CEO stated volume as a tier 1 supplier is only likely to ramp in 2029, into the 2030s (not from 2027 as mentioned in the RNS) and thus has no impact on cash generation in the short to medium term.”

Tipping went on to stress that the key indicator of success is cars on the road, stating: “Until Smart Eye starts reporting this number, the tangibility and true worth of the contract wins remains unclear.”

Still, I’m sure the figures put out by Smart Eye will help it immensely in any future fundraising efforts.

Aside from dealing a knock-out blow to those who think Smart Eye is the global leader in driver and occupant monitoring, the note maintained its ‘Buy’ stance on Seeing Machines and its 12p price target.

Importantly, it also confirmed that Seeing Machines has, as promised by CFO Martin Ives, started to cut its expenditure. Analyst Oliver Tipping wrote: “Management confirmed that it has executed the first of its cost-cutting measures aimed at bringing the cash burn down to break-even by FY25 (-$3m a month exit run rate from FY23). We await further details in the 1H24 update, but this will be crucial in underpinning the long-term viability of the business. For now, the company has a strong balance sheet, which should see it to its targeted break-even date.”

Auto contracts worth $1bn

With its latest win Seeing Machines now has auto contracts officially worth US$366m. However, as previously stated, given Seeing Machines propensity to cite minimum values that turn out to be much larger, I believe the real worth of those contracts is approximately 3 times that. Yes, $1bn!

Why is that significant? Well $1bn in auto contracts surely makes it a very desirable candidate for a takeover in the very near future, particularly as it is soon to hit break-even.

With the move to assisted driving taking over from dreams of full autonomy and legislation coming into effect this year in Europe that mandates driver monitoring, the future is looking very bright for Seeing Machines.

The writer holds stock in Seeing Machines.

[base7] 21/12/2023 16:42

Agree entirely Buggy & I wonder if we were a well funded start up whether we would be in a position to IPO next year for substantially in excess of $1bill-ie once G3 is launched & expected post production contracts signed,together with increasing RFQ wins + Aviation progress.
G3 launching on schedule is crucial,together with decent sized initial contracts & we could yet have an excellent FY24

[jpuff] 21/12/2023 15:51

Many thanks Buggy for that helpful information and yes it was a genuine question.

[buggy] 21/12/2023 15:21

Jpuff,

In case this is a genuine question, the answer is two fold:

1. This technology has not fully taken off, not a huge volume of cars with this at the moment as it is a nice to have feature at the moment.
2. PM the CEO seems to promise much and miss his own deadline for delivery.

Having said that, the first point is about to change as DMS is to become a mandatory requirements for autos in Europe.

With respect to second point, PM is just far to optimistic in his timeline but the inflection point is this coming year when all the stars align.

Regulatory tailwinds will drive mass adoption. Despite many miss-steps by the CEO this share will do very well as there are few genuine competitors in this space, [ one being Smart Eye, irrespective of what some on SEE BB will want you to believe].

Smart Eye and SEE will carve up the majority or orders in this space.

Other reasons why you may consider researching to see if you should buy in are:

a) The Fleet market is huge and will the associated monitoring services is another element which is often ignored by most. Fleet will easily be turning over £100M if they can reach 200,000 connections, which is not far away once Gen 3 is lunched.
b) Gen 3 which is the 3rd Generation Guardian is scheduled to be finally lunched at CES 2024 ( 6th Jan 2024, I believe).
c) The aircraft business will probably take 2 years to start showing something but again is very lucrative. [ SEE is in exclusive agreement with Collins, and they are currently in the development phase of products to take to the market].

My view: In spite of some management mis-steps I believe that this will do well because the time for the technology has arrived and there are not many genuine competitors.

Disclaimer:
I hold shares in SEE. I think that the management could have done better but then I suppose their is always room for improvement where ever you are.

This is not an investment advice , just an attempt to give you what I consider to be an honest answer. You can then do you own research and se if this suits your investment criteria.

NOTE:
My Personal view: I believe that it will make another step increase once Gen 3 is launched at CES 2024 ( 6th Jan 2024).

[jpuff] 21/12/2023 13:13

All interesting technology and they seem to be doing well, so the $64k question is why are the shares such a poor and multi year underperforming investment?

[boonboon] 21/12/2023 11:36

But also a much higher cost base.For what it's worth I think long term seeing machines is the one to be in, but short term Smarteye might pick up more contracts. They're not putting the money into R&D so might struggle in future.

[amt] 21/12/2023 11:07

Seeing machines turnover is about 3 times that of smarteye and growing faster.

[boonboon] 21/12/2023 10:05

They're shutting down tomorrow till the 7th of January so wouldn't expect anything other than CES announcements at the beginning of January.

[unionhall] 21/12/2023 09:37

"The fact is we've won 2 small contracts this year and only 1 this quarter so far...."

Small indeed but they were both in this quarter.

[nvhltd] 21/12/2023 06:29

There's still a few days to go before Paul fails to deliver on yet another of his 'expectations' to deliver several RFQ wins before the end of the year. The lack of share price reaction is the result of historical failures to deliver on contracts, opportunities, growth, revenue and profit. The market just doesn't trust the company to deliver anymore. Talk has been cheap over the years and Paul has continued in that vain of over hyping expectations with loose statements. The last public statements said they were working on 12 RFQ's,several would drop by the end of the year and we are firmly in the second billion dollar market size. The fact is we've
won 2 small contracts this year and only 1 this quarter so far so the market wants more, much more before they start to let the share price rip.

2023 has yet again been another very disappointing year for delivery.

[napoleon 14th] 20/12/2023 17:10

Another contract, but for 2026, & spread over how long?
No wonder the shares did not react, but this is progress anyway...
Seems like EVs & "smart cars" are right up our street, but when does it pay???

What we need is proper eps & ebitda to get share price moving.
One day, Rodney, one day....!

[boonboon] 20/12/2023 12:05

Their market cap is slightly bigger than us so the market doesn't see them as a smaller company.

[amt] 20/12/2023 11:41

That's another significant win.
Smarteye is a very small company compared to Seeing Machines.

[gutterhead] 20/12/2023 08:51

Whoopee……;
Not
Revenue between now and 2028

[boonboon] 20/12/2023 08:07

Still a long way to go to get to the $1 billion order book.

[wsm812] 20/12/2023 07:49

£30m lifetime contract is a nice starter, however I don't think this alone will affect the share price much. I am happy to be proven wrong however!

[hazl] 20/12/2023 07:18

That's more like it!

[skinny] 20/12/2023 07:01

20 December 2023

Seeing Machines appointed to deliver US$30M Automotive program for new European OEM customer

Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, announces its 17(th) Automotive program award with an existing European Tier-1 customer for a new European OEM.

The program will be delivered via the Company's FOVIO e-DME software library (embedded Driver Monitoring Engine) and is scheduled to start production in 2026, carrying an initial lifetime value of US$30M.


more.....

[smithless] 18/12/2023 12:52

See Smarteye is up 30%+ today, after a design win with a North American OEM and tier1. I have no idea if Smarteye is a good or bad company, but it does come out with sensational PR. It now states it has 296 design wins with 20 OEM's which I thought wow. Then I looked at its Jan - Sept '23 revenue for automotive and it was just £4.4m on 229 design wins. I read how Tobii defines a design win, which it found hard to put any value on. This is what Tobii states.

The automotive industry is rapidly changing due to the ongoing technology shift, disruption from new entrants, and accelerated innovation pace. This is also causing a changing purchasing behavior from OEMs. Design wins in the automotive industry are not a guarantee of future revenue, and sales may not correlate with design win values. Mid-life redesigns and decisions to re-source components can change the projected timeline of a design, or models may be canceled entirely. Pricing estimates are made at the time of a request for quotation by an OEM. Changing market or other conditions between the time of a request for quotation and the actual order may require a lower average selling price than initially expected. In combination with inherently long lead times in the industry, forward-looking projections of lifetime value, volumes, and average selling price may give rise to undue reliance and overconfidence in the earnings potential and value of each deal. As a result, Tobii does not believe it is possible to, with a sufficiently high degree of certainty, provide guidance on the revenue or potential future opportunities with manufacturers.