Surface Transforms Share Discussion Threads

[toffeeman] 28/9/2020 10:22

OEM 3 will be the biggie IMO

regards

Ferdy

[longshanks] 28/9/2020 10:06

Worth noting too that gross margin has increased to 65% from ~60% historically.

Clearly operational efficiencies from the new plant are starting to feed through,

[rivaldo] 28/9/2020 09:37

Agreed longshanks - the hints on OEM3 and OEM1 are encouraging.

Great also to see SCE state that their aim of halving production costs has now been achieved with OEM Production Cell One.

Similarly to Zeus Capital, Finncap have retained their 55p price target, but note that:

"the DCF is based on one cell only and equates to c13.5x full capacity earnings. More contract flow triggering the next cell investment could drive further significant valuation upside. As the business becomes more established, the discount rate would also likely fall further as well. As a result, we see our 55p target as a staging post on a much longer journey of upside."

[bones] 28/9/2020 09:12

I also recall from the July Q&A, David Bundred saying:

“As it happens in respect to EV question I think our first mainstream electric vehicle client was the Chinese backed Koenigsegg Gemera. Do not underestimate the combination of Koenigsegg’s Technical brilliance and Chinese deep pockets.”

(My bold highlighting)

The size of the Chinese EV market must be huge so if Surface Transforms have effectively used Koenigsegg as a trial for a wider use of CC brakes by NEVS, then might that help flesh out the meaning of that comment about Chinese deep pockets?

[longshanks] 28/9/2020 08:57

OEM3 have certainly not gone away, but it is clear that ST will now reach significant production volumes with or without them.One shouldn't forget though the large investment in money and time made to date by OEM3 in getting the best CCST product for their parts bin.The fact that a data driven OEM selected CCST over the best that Brembo could supply won't have been missed. I am sure they are evaluating options for implementing the brakes on a single model much as OEM5 did as a toe in the water.The item from this RNS that interests me though is the mention of OEM1.

[bones] 28/9/2020 08:45

Snippet from Zeus Capital update note (with TP of 57p):

“Two-thirds of new projects are now for EVs.“

It’s not clear what they mean by “new”. Pipeline or existing?

[bones] 28/9/2020 08:31

”OEM 3: This customer has a unique environmental test that the Company has been endeavoring to pass for some time now. It is encouraging to report that considerable progress has been made over the last year with discussions on target models continuing.“

Is it possible that OEM3 is one of those customers that the company hopes or even expects to convert to contract within the next 6 months? They seem confident of the profitability timelines in 2021 and 2022 despite the accelerated cost profile resulting from the OEM8 SOP target. OEM3 would help to reinforce the targets.

[condom2] 28/9/2020 07:54

I thought the previous price target at 45p a tad light ,but after 15 years of patience not an issue. These numbers reinforce the confident tone from the board.Very well done. IMHO.

[graham1ty] 28/9/2020 07:46

Zeus raise target price to 57p

[montynj] 28/9/2020 07:22

Great results

[geko5trade] 27/9/2020 18:53

davidosh/quemaster
I pretty much agree with all of that. I'm always interested to hear his comments but I think it highly unlikely he will have greater insight into the company than many on here.
SCE have pulled off a major coup and it's fairly obvious where they are positioned right now. There are still risks and pitfalls but the balance of probability has shifted very much in their favour.

[quemaster] 25/9/2020 22:27

I followed "Paulypilot's pub " board religiously back in the day and it shaped the way I look at companies so I am forever grateful to Paul Scott and all the other major contributors.

I also have to say this bb is up there with that level of quality, it has been going for more than 10 years with mostly the same posters.
Paul Scott will probably never know the company as well as many of the people on here but I am still very interested in his opinion.

[davidosh] 25/9/2020 21:24

I think you are all being a bit hard on Paul Scott as frankly he covers an enormous number of small to mid cap sized companies and his analysis and detailed explanation of the accounts of those companies is without doubt the best there is available to investors and that is every day of the week. I doubt any of you would want to have to do that even once a month and stand by what you have written

He has been named analyst of the year and won awards for his work and gets 10,000 reads every day......that does not happen if you write material that is not worth reading !

I think you need to see the quality of the discussion and debate on these panels as there were 500 in the audiences in July and they are very popular as a way of helping investors learn more about a handful of companies that they may not otherwise have heard about.

[swiss paul] 25/9/2020 21:05

Pauilypilot = retails stocks and therein lies his speciality

[geko5trade] 25/9/2020 19:23

Have to say many of the posters on here are far more knowledgeable than Paul Scott re SCE. Yes Paul got very lucky in the early days when he made his first million. You make your own luck and all that but...
I first bought SCE on OFEX taking a decent holding and frankly couldn't make up my mind whether to keep a sizeable holding or not. I took a more significant position on the recent announcement because they have clearly turned the corner and have reached, or are about to reach, the sort of critical mass that I thought they might be capable of. There are still pitfalls ahead though you can see from the video that the management are brimming with confidence and can barely stop grinning like Cheshire cats. There are risks because the basic model is of an old school manufacturing company and there are the kind of risks that technology companies have where their tech can be copied, worked around etc. No one ever knows exactly where the market is going. Nevertheless risk reward has changed very significantly and the next couple of years should witness the kind of growth period that was anticipated 20 odd years ago. It has been a long time in the making and usually change in the automotive industry is notoriously slow. Right now they are very well positioned for what is quite a rapid shift in technology. All imo.

[pockstones] 25/9/2020 18:59

Paul Scott writes at length about what he owns - pretty rum lot frankly Revolution Bars Boohoo that sort of stuff- and rather briefly while admitting ignorance on breakthrough technology stocks. I think he earns his living from writing about rather than owning shares

[longshanks] 25/9/2020 10:47

"...contracts now appear to be rolling in for supercars..." that comment says it all. He really hasn't got a basic grasp of the business. More fool him, and this a man who proclaims to be interested in "anything to do with cars".

[trickydicky1] 25/9/2020 10:28

The biggest successes and disasters always attract the most sceptics. It is easy to bash risk. Which is why our “fun management industry” prefers to stick to rock solid businesses like Rolls-Royce, Carnival, EasyJet, BP, etc., etc.

[rivaldo] 25/9/2020 10:15

SCE via KJ are presenting here on 8th October (along with IHC which I also hold!):

[graham1ty] 25/9/2020 09:34

In fact, I think Paul Scott ( or anyone else) has the right to be pretty sceptical. Nearly 20 years to “break through”, multiple fundraising’s, constant jam tomorrow ( aircraft, military).

Thankfully, all of that is history

[amt] 25/9/2020 09:25

Torotrak was a new revolutionary technology to change the way gears operate in vehicles. SCE is competing with an existing technology and market. Its doing it better than incumbents.
Anyway it sounds like he has had time to study it now so let's hope he reaches a very different conclusion.
In the long run it's the financial performance that will drive the share price so I don't really care. It would be nice to get a boost to the share price though. That's another attraction of SCE in that the management tell us how it is without any hype.
Same thing with another of my investments Tandem plc which gave us it straight, now the share price is reacting after a series of good financials.

[bones] 25/9/2020 08:45

Amt, I think the point of the comparison was valid, in terms of the earlier and long R&D, fundraising, no revenues, etc. Clearly things are very different now! Hopefully his viewing of the webinar will have opened his eyes a little.

[longshanks] 25/9/2020 08:27

Thanks for sharing quemaster. Must have been some different pundit that I saw that comment from (or a different share!)

[amt] 25/9/2020 08:13

Well his comment on 14th September when contracts were already in place and the global market is hundreds of millions was rather staggering. Anyway let's hope he has studied it since and realised its not remotely like Torotrak.