Tag Archives: Smart Eye

Peel Hunt note questions Smart Eye and Seeing Machines comparison

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Peet Hunt Analyst Oliver Tipping has issued a broker note on Seeing Machines that questions the contract size for Smart Eyeā€™s recent US$150m win, while stating that Seeing Machines puts out minimum values for its wins.Ā 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: “ItĀ  isĀ  importantĀ  toĀ  rememberĀ  thatĀ  the contract value SeeingĀ  Machines reports is conservativelyĀ  basedĀ  offĀ  minimumĀ  productionĀ  volumes,Ā  which areĀ  likelyĀ  toĀ  beĀ  farĀ  lowerĀ  thanĀ  theĀ  actualĀ  productionĀ  valuesĀ  forĀ  these contracts.”

Then he went on to caution investors. ā€œIt is vital for investors to be aware of theĀ  differencesĀ  betweenĀ  theĀ  numbersĀ  thrownĀ  around by differentĀ  companiesĀ  in the DMS market. For example, it would be easy to be distracted by the SEK 1.55bn (US$150m) figure quoted in Smart Eyeā€™s most recent win (which we believe to be General Motors). However, we are unclear how this figure has been calculated as Smart EyeĀ  doesĀ  notĀ  disclose itsĀ  methodĀ  for calculating theĀ  valueĀ  ofĀ  theseĀ  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) andĀ  thusĀ  hasĀ  noĀ  impactĀ  onĀ  cashĀ  generationĀ  inĀ  theĀ  shortĀ  toĀ  mediumĀ  term.ā€Ā 

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 ā€˜Buyā€™ stance on Seeing Machines and its 12p price target.Ā 

Importantly, it also confirmed that Seeing Machines has, as promised by CFO Martin Ives, started to cut its expenditure. Analyst Oliver Tipping wrote: ā€œManagement 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.ā€

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.

Donā€™t despair with SEE: do more research

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I must admit to having been a bit distracted by the ongoing genocide in Gaza over the past couple of months. Still, I felt it important to provide my views on the recent Kr1.55bn (US$150m) Smart Eye contract, as I know a lot of investors are rightly concerned by lack of news flow on the automotive front from Seeing Machines (AIM: SEE) – aside from a relatively small (US$15m) contract win in early November.

I do think the recent Smart Eye contract is with General Motors, as that has been the conclusion of 3 sources better placed than me to know about it (Colin Barnden, the RedEye analyst and my private source). Am I particularly concerned? Quite frankly, no. My guess is that, and it is only my guess, the contract is dual sourcing at bargain basement levels. As to the size of the contract, well SmartEye normally pump out the biggest figure they can so the lifetime value given is likely an absolute maximum.

Still, it is big positive for SEYE and I wish them well. The market is big enough for both SEE and SEYE and things are clearly hotting up in this space. 

As to SmartEye, being a Tier 1? Well, I think that is wishful thinking. Possibly a case of necessity being considered a virtue. For I still maintain my thesis that SEE takes 75% of the auto market with the Magna mirror and Valeo.  

Positives for SEE

If there is a positive for Seeing Machines, itā€™s that the logjam regarding larger auto contracts appears to be over. Moreover, the SEYE contract starts in 2027 so I think SEE via the Magna mirror has won a lot of contracts that will start before then.

That said, if we donā€™t get a big auto contract by the end of this quarter itā€™s definitely a disappointment. Itā€™s particularly so given the fact that the strong likelihood of multiple contracts this quarter was flagged by both CEO Paul McGlone and his CFO, Martin Ive, in various interviews.

Still, I do believe they are honest and have been let down by OEM shenanigans re. The announcement of further contracts. My hope is that CES will deliver the news weā€™ve been waiting for re. Auto, with great news coming for Aftermarket with the launch of Gen 3 Guardian.

Indeed, Iā€™ve been impressed by Ive since he joined (and not just because he looks like my younger brother). I also hear that he is cutting expenditure, as promised, to ensure SEE reaches breakeven as promised.

More effective communication

In the absence of said contract news, Iā€™d like to see more timely and effective communication to stem the concerns of private investors. They (unlike fund managers) canā€™t just ring up the CEO to check on their investments. Moreover, for a private investor their investment often represents a huge proportion of their investment portfolio, not a mere 5 per cent maximum as in most funds.

I ask for this because I fear that many private investors are currently selling down their holdings because of a lack of reassurance from the company. Times for many are tough and Iā€™d hate for private investors to miss out on what I increasingly believe will be rich rewards.

Please donā€™t take my word for any of this, itā€™s just my humble opinion and Iā€™ve been wrong on details in the past. That said, being too early into an investment isn’t the same as being wrong. Indeed, I maintain that my original investment thesis remains intact, which is why I still hold this stock. In any case, do your own research as it will benefit you in the long run.

The writer holds stock in Seeing Machines.

Tactical move widens Seeing Machines’ moat

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I think the Devant collaboration announced on the 20th June is a tactical move to widen Seeing Machines’ (AIM: SEE) moat. The data derived from real-life driver experience, known as its ‘river of gold’ has hitherto protected its AI-fuelled technological lead. Now it will be augmented by a sea of computer-generated edge cases from Devant, a specialist in synthetic data generation who is focused on the niche area of in-cabin monitoring. 

This should help Seeing Machines speed up the development of DMS and future in-cabin monitoring applications that are being demanded by the industry and regulators, putting Seeing Machines even further ahead of its competitors.

Far from an admission of weakness, this move demonstrates that Seeing Machines is doing all it can to maintain its leadership position ā€” without breaking the bank. I don’t envisage any competitor overtaking SEE within the next 3 years. Indeed, part of me wonders if we might not end up acquiring Smart Eye or Cipia eventually. However, I’m betting Seeing Machines gets acquired within 2 years.

Auto RFQ delays 

I appreciate the lack of auto OEM contract wins being announced has rattled many of us. I think it is entirely down to OEMs waiting until the last possible moment to decide how sophisticated a DMS/OMS to use, in the light of tighter EuroNCAP regulations that are coming into force in 2026 but which still haven’t been totally tied down.

This has been confirmed to me following conversations with people at EuroNCAP ā€” sadly, I find myself curiously unable to obtain basic information from official SEE channels following scoops that have upset some people. (But, like a would-be lover suffering from unrequited love, I am still fully invested in this brilliant company).

Q&A Euro NCAP

Hereā€™s a brief Q&A with Euro NCAP:

I understand that the EuroNCAP 2025 protocols aren’t yet out. Can you tell me:

Q. When do you expect them to be published? 

A.  2026.

Q. What exactly is the process for their iteration and publication? Is a draft put around to the industry players for comment? If so, at what stage are they currently?

A. Currently under development, discussing the new requirements and test provisions alongside industry. 

Q. Have they been delayed, if so why?

A. Initially considered for 2025, we finally decided to switch to a 3-year cycle, so starting their implementation from 2026. This was to allow sufficient development timing for protocol development and giving industry sufficient headroom for technology adoption.

Q. What provisions regarding driver monitoring are they likely to include and how advanced are they likely to be? (I know there is a roadmap but I’m not sure about the precise details of it and how it applies to driver monitoring).

A.

  • Driving under influence (2026)
  • Optimised passive restraint systems based on occupant posture and/or size (2026)
  • Increased requirements for the precision of determination on non-reversible driver states e.g., drowsiness, unresponsive driver / sudden sickness (2026)
  • Specific provisions for Assisted and automated driving (2026)
  • Link of driver state to the way ADAS functions are tested and assessed e.g., FCW/LDW sensitivity (2026)
  • Cognitive distraction / mind wandering (2029/2032)

The writer holds stock in SEE.

Smart Eye fairytale reaches a climax

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With the news that Smart Eye is desperately using a SEK 60m (Ā£4.8m) bridging loan to finance its business while it attempts a SEK 325m (Ā£25m) discounted rights issue, the greatest Scandinavian fairytale since Hans Christian Anderson wrote ā€˜The Emperor has no clothesā€™ appears to be coming to a dramatic climax.

It’s sad news for investors who thought that the Emperor really was the leading global provider of driver monitoring systems and who believed that the 103 design wins it has long boasted of, and still boasts of, will ever go into production.

Indeed, the press release announcing this news reads like a profit warning, as it seeks to blame Covid for its problems, stating:

ā€œThe consequence for Smart Eye has thus been that the implementation of the Companyā€™s software for DMS and Interior Sensing, as well as licensing revenues from existing design wins have been postponed. Hence, commercialization of design wins is expected to be realized later than originally estimated.ā€

Notwithstanding the massive dilution that investors will experience at the discounted rights issue, investors should really ask themselves how likely it is that Smart Eye will achieve its stated intention of a positive cash flow by the second half of 2024, given the parlous present state of its finances. 

How many public companies can you name who are forced to use a bridging loan to stay afloat?

Investors will have to wait until January 24th to find out the price of the rights issue. Given the likelihood of the price plummeting before then, they are likely to sell in droves. This is turn will likely increase the resulting dilution necessary to raise the required funds.

Of course, investors should do their own research as I freely admit that Iā€™m a long-term holder of shares in Seeing Machines — and had until a few years ago regarded Smart Eye as a serious rival.

Magna-ificent performance from Seeing Machines

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Following recent announcements relating to Magna, reinforced by analysis from CEO Paul McGlone at an investor event in London, Iā€™m confident that Seeing Machinesā€™ technology lead across, auto, fleet and aviation will soon start to be reflected in its share price.

The recent news that auto Tier 1 Magna is paying US$17.5m for the exclusive rights to use Seeing Machines technology in its rearview mirrors until the end of 2025, while also agreeing to invest up to an additional US$47.5m, just confirms its global leadership position in Driver and Occupant Monitoring Systems (DOMS). 

Crucially, the cash injection removes any concerns that Seeing Machines needs to raise cash. It is now fully funded to profitability in 2024.

The Canadian Tier 1 Magna has gone exclusive with Seeing Machines in rearview mirrors because it aims to the vast majority of that market, 100% has been suggested by one expert, as no real rival to their DOMS offering currently exists. By partnering with Seeing Machines it has a product that is apparently superior to that of its competitors in terms of price, performance, and time to market. Thatā€™s presumably why it won the huge A$125m VW contract in December 2021. 

By 2026, itā€™s likely that Magna will have won as much as 50% of the overall auto DOMS market in partnership with Seeing Machines – since half of DOMS is forecast to be delivered via rearview mirrors. Thus it will have done to its main rival Gentex what Qualcomm has done to Intel in auto. The huge VW win with Magna should have confirmed this, future wins certainly will. 

Itā€™s no coincidence that both Magna and Qualcomm have chosen to partner exclusively with Seeing Machines. These moves should be seen as part of a strategic land grab that I expect to deliver Seeing Machines at least 75% of the auto DOMS market by volume by 2026.

That is because its competitors (Smart Eye, Cipia, and Jungo) arenā€™t winning anywhere near the number or volume of RFQs that Seeing Machines is. For example, Smart Eye appears to have effectively been replaced by Seeing Machines in forthcoming BMW models. The 10 BMW models featuring Smart Eye technology are from past wins, such as the X5 (2015) and M8 (2018). 

Of course, OEMs may do some dual sourcing. Speaking to Smart Eye last week its CEO Martin Krantz tentatively said that Smart Eye ā€œwill probably be in future BMWsā€. I wish him luck but I donā€™t think it is going to be a threat to Seeing Machines going forward. 

Indeed, investors need to beware of looking in the rearview mirror at market share unless they want to crash their prospects for significant financial gains. For those paying attention to the road ahead, itā€™s Seeing Machines that is in the fast lane to market dominance. 

Over the past year, Seeing Machines states that it has won 80% of the RFQs for which it has bid. Iā€™m confident it will maintain that win rate with the $A1-2 billion of contracts for which it is currently bidding.

Looking at design wins, Smart Eye currently boasts 94, while Seeing Machines has 120. However, even this figure fails to reflect the latterā€™s dominance. Not all of Smart Eyeā€™s 94 ā€˜winsā€™ made it into production, in contrast, every Seeing Machines design win has hit the road. 

Iā€™ve long admired the Smart Eye people – not least for their PR bravado – but it canā€™t blind me as to where I should invest my hard-earned dough. Iā€™d also be doing readers a disservice if I didnā€™t state what I honestly believe. 

Following the Seeing Machines investor presentation Friday, (when the video is posted I will provide a link) Iā€™m very confident that an inflection point has been reached.

Increased margins

From now on license revenues for vehicles hitting the roads will begin to ramp up for Seeing Machines. This is a very high-margin business as the main costs have already been borne in the development phase. It currently has a pipeline of A$395m in auto but this is expected to grow substantially over the next few years on the back of further wins.

Similarly, in aftermarket more large enterprise customers such as Shell are coming along. These margins for selling the product and the monitoring service are much higher than selling indirectly via distributors.

It should also be noted that Seeing Machines Gen 3 Guardian will be launched by the end of this financial year, opening up the prospect of huge scale-up in Fleet sales. The product has apparently been re-engineered to reduce costs yet will be better, with automotive-grade additions and much faster install times. In addition, there is huge money to be made from the service element of monitoring the drivers.

Thus, now there is clear visibility of increasing revenues and cashflows with SEE set to make huge profits over the next few years.

In addition, Iā€™m still confident that a lucrative license deal will soon be struck to deliver Seeā€™s pilot monitoring technology into the cockpits of aircraft. Being early is the same as being wrong but I hope by Christmas Iā€™m proven right.

Bids coming

As readers know, Iā€™ve long believed that SEE will face a near-term bid. To that view some have argued that such is its success that it really doesnā€™t need a takeover to prosper, unlike some of its rivals who hope to be saved by one. Iā€™d certainly agree with the assessment that Seeing Machines could perfectly well prosper as an independent.

However, even if Seeing Machines isnā€™t ā€˜up for saleā€™, it doesnā€™t mean that it cannot be bought. A wise man recently told me: ā€˜Great companies get bought NOT soldā€™. Well, I believe Seeing Machines is a great company.

Ask yourself, how badly must some company want what Seeing Machines has? Its technological lead, data, and market leadership would take years and many billions to replicate for even a company of the stature of Google, Apple, or Amazon. If you had the money (and they do) why wouldnā€™t you just buy it?

If Magna is prepared to pay millions for the exclusive use of SEE technology for a couple of years, why wouldnā€™t they want it permanently? Qualcomm, AMD, Intel, and Nvidia also have reasons to enter a bidding war when the starting gun is fired. Indeed, even Gentex does if it wants to win future DOMS rear-view mirror contracts and protect its market share from rivals such as Magna.

Thereā€™s even the argument that a consolidator might want Cerence and Seeing Machines to create something very special.

Value stock

As legendary value investor Irving Kahn taught, investing is an art rather than a science but I think were he alive today, heā€™d take an interest in Seeing Machines as it ticks many of the criteria he looked for in an investment.

The good news for investors is that they can now sit back and enjoy the ride. It has been substantially de-risked, which is why Cenkos upgraded to 25p last week. I expect the other analysts following the company to do likewise in short order as the contracts and license deals roll in. 

The writer holds stock in Seeing Machines.

Desperate stuff from Redeye

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This weekā€™s note on Smart Eye (SEYE) from a Redeye analyst was disappointing and, quite frankly, unfair to investors who mistakenly believe it’s the leader in driver monitoring (or, as it might now term it, ā€˜interior sensingā€™). It isnā€™t. 

Perhaps desperation at the fall in Smart Eyeā€™s share price following the Volkswagen (VW) win by Seeing Machines has prompted this latest attempt to maintain the myth that Smart Eye is the market leader. However, any sober analysis leads one to question this.

Smart Eyeā€™s recent moves on the acquisition front are evidence for me of its late realisation that it canā€™t compete on the DMS/OMS front with Seeing Machines, proven by its recent failure to win VW.

Furthermore, I think SEYE has overstated the value of its wins to date, while Seeing Machines has understated its own 8 OEM wins. For example, One of Smart Eyeā€™s early wins was with BMW, but it has since been supplanted by Seeing Machines. VW and Mercedes have also gone with Seeing Machines. Do you see a pattern?

In the US, General Motors, Ford and FCA (now part of Stellantis) chose Seeing Machines. Similarly, Fisker and Byton chose Seeing Machines. 

The much-vaunted early Audi design wins back in 2017 by SmartEye have also failed to go fully into production, as has the Jaguar Land Rover win a few years back. Redeye naively assumes that they have been temporarily postponed. As the analyst states on page 5 of this note published on 9th May, 2021: ā€œSmart Eye says it has still not lost any design wins, but some are postponed for external reasons.ā€ Let me suggest that those wins have been lost, as the auto companies concerned realise Seeing Machines’ technology is more advanced.

Importantly, the VW and Fisker wins indicate that Seeing Machines is not only the leader in DMS but is also winning as car manufacturers seek to build in occupant monitoring systems and move to interior sensing. Yes, Smart Eye can talk the talk re. Occupant Monitoring but the only cars currently going into production with OMS have a Seeing Machines system.

A further indication of SEEā€™s leadership position is evident from the fact that Qualcomm chose to partner only with Seeing Machines. Similarly, Magna has chosen to use Seeing Machines technology. 

My research indicates that Smart Eyeā€™s ā€œpure softwareā€ model effectively means that it is treated like a commodity and doesnā€™t really gain the respect of the Tier 1s whereas, in sharp contrast, Seeing Machines is acknowledged as the expert in DMS/OMS. After all, OMS is effectively only DMS with more occupants. And Seeing Machines leads the way in DMS.

What that means is that OEMs are far less likely to take a chance on Smart Eye for big programmes delivered to short timescales, especially when high-level DMS will be make or break in achieving 5 star NCAP ratings from 2024. It is simply too important for them in a fiercely competitive market to take a chance. For example, imagine the pain that Renault recently experienced at the hands of Euro NCAP, receiving 0 stars for shoddy safety in its Zoe. Such an event must be concentrating minds at car manufacturers around the world. 

Thatā€™s why I think Seeing Machines is going to clean up in the DMS/OMS market. Okay, Smart Eye will win a few Chinese models and low volume models elsewhere but for premium and large volume RFQs I donā€™t expect it to win any of note. 

A further problem for Smart Eye may also be that QC is set to take away its Chinese lunch in due course, supplying Seeing Machines technology as part of its system.

Of course, I may be wrong or, perhaps, my investing in Seeing Machines has affected my judgement.

Well, hereā€™s a little test. Back on 22nd October, 2021 the Redeye analyst wrote: ā€œThree of the largest DMS procurements to date will be completed within next few quarters ā€“ where ā€˜Smart Eye is a force to be reckoned with in all threeā€™. Though we donā€™t know what this means, we believe Smart Eye is confident of getting at least one or two of theseā€.

Well, one of them has been completed and it wasnā€™t Smart Eye that won it. Iā€™m confident that Seeing Machines will win those other two in this financial year, as well as a host of others this year and next. 

Fleet

Iā€™m expecting great things from Seeing Machinesā€™ Max Verberne and his team in fleet, similar to what Nick DiFiore and his team have achieved in auto.

Iā€™m therefore confident that 2022 is set to be a transformational year in fleet for Seeing Machines. Despite the fact it already has approximately 32,000 fleet installations, the pipeline is rapidly expanding, 40% annual growth in revenues is expected. The Shell deal is huge and offers the potential for many thousands of installations each year, National Express is also in the process of rolling out Guardian tech to its enlarged fleet following the acquisition of Stagecoach. That target market represents approximately 40,000 badged as National Express, with approximately 10,000 more belonging toĀ  contractors.

Moreover, such is the potential for driver monitoring as part of an overall control system that it is clear this is only the beginning of a global ramp up in sales. Seeing Machines is only scratching the surface of the potential within telematics with its current partnerships. Europe and the US will be screaming out for this technology as regulations tighten and companies seek to improve both safety and reduce emissions. This will all become apparent as we hear more about the introduction of its 3rd Generation fleet product.

In contrast, SmartEye is ā€˜pre-revenueā€™ with a fleet operation that only launched in March 2021, with 20 staff. It had a ā€˜pilot projectsā€™ operational in July and I look forward to hearing about some meaningful revenues one day soon.

Aviation

Smart Eye is even further behind in aviation. To the extent that even Redeye doesnā€™t want to talk about it. Suffice to say that it has yet to fly in Aviation.

By comparison, Seeing Machinesā€™ Pat Nolan is airborne, and charting a course for a smooth landing on profit central. Take, for example, the recent agreement with Collins Aerospace, which is the worldā€™s largest Tier 1 avionics company.

In addition, via CAE and L3 Harris, Seeing tech is already in simulators used by Quantas and the Royal Australian Air Force. It is also working with Airservices Australia to use its technology within Air Traffic Control (ATC).

Summary

In summary, not only does Seeing Machines lead in auto, it is far ahead of any competitor in fleet and the only player in aviation. Too little, too late, sums up Smart Eyeā€™s offering in both fleet and aviation. 

I expect the next second half of this financial year to confirm the pre-eminence of Seeing Machines in all three transport sectors. Seeing Machines’ ever-growing pipeline will make this very clear, very soon.

Yes, Smart Eye does have significant value and potential. However, in my humble opinion, it could be an expensive mistake for an investor to presume it is in the same league as Seeing Machines. Of course, any investor should do their own research.

Full-year results for both companies should bear out what I have stated here. In the end, the acid test for both is the visibility of increasing revenues and profitability. If I am correct, Seeing Machines should impress on the upside and Smart Eye will fail to match that.

The writer holds stock in Seeing Machines.

The Pretenders are dead, long live the King of DMS

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At yesterdayā€™s Capital Markets Day for Seeing Machines it was standing room only, as Colin Barden an independent analyst at Semicast Research presented the news that investors in Seeing Machines have long waited to hear: though the coronation has been delayed, it will be the King of DMS.

It was hard news for rivals but, in one slide, Barnden presented his projections for the market shares come 2022. He estimates 40-45% for Seeing Machines, followed by 15-20% for Mitsubishi Electric. All other rivals are left lagging far, far behind, with Smart Eye in particular estimated at 5-7%.

That said, I saw no evidence of complacency from the Seeing Machines staff, quite the reverse. McGlone, in particular, came across as a man determined to deliver profitable growth. He certainly doesn’t look like the sort of guy who will let a rival eat his lunch.

Paul McGlone, CEO, Seeing Machines

Paul McGlone, CEO, Seeing Machines

The growing interest in its DMS technology was clear from the host of analysts I met at the event: Sanjay Jha of Panmure Gordon, Lorne Daniel at FinnCap, Caspar Trenchard at Canaccord Genuity and even one from Steifel (there may well have been others). Iā€™m sure the house broker Cenkos was represented but house analyst Jean-Marc Bunce was the invisible man on this occasion.

Fleet

Probably, a wise decision on Bunceā€™s part as Iā€™ve been trying to find out why heā€™s taken such a conservative stance on fleet. In his note dated 23rd September he states on page 1: “We believe the guidance for 27-30k connections at the end of FY20 is conservative and underpinned by a strong pipeline.ā€

Yet on page 4, he contradicts this, becoming ultra conservative, when he writes:Ā ā€œā€¦.our Fleet connection forecasts are based on connections below the guidance of 27-30kā€.

I wondered why he decided to do this and also upon what number of fleet connections he actually based his projected revenue figure of A$20.9m? By my calculations to arrive at A$20.9m he must have used less than 18,000 installations, which does appear excessively low.

Yesterday the new CEO, Paul McGlone was in combative mood as he faced down attempts to extract projections on the number of Fleet sales for 2020, sticking to guidance of 27-30k. He even declined to provide a current figure. I assume this is because Seeing Machines hopes to upgrade at the interims and doesnā€™t want to spoil the surprise. Personally, I donā€™t particularly like surprises even to the upside.

The reduction in the unit cost of Gen 2 Guardian by 21% announced yesterday must surely drive increased uptake from fleets as will the increasing number of distributors and deals with insurers.

Mike Lenne, the Human Factors expert who heads up Fleet does appear to be its secret weapon when it comes to persuading Fleets to use their technology to improve safety. HIs calm, analytical approach should pay dividends and puts Seeing Machines in a league of its own.

It was the first time Iā€™ve met Tim Edwards, one of the original brains behind the technology along with fellow co-founder of the company Sebastien Rougeaux. Edwards comes across as a very modest man, particularly for a genius who jointly developed this life-saving technology.

Aviation

While CEO McGlone and Pat Nolan, who heads up Aviation, were chided slightly for building up expectations re. an aviation licensing deal with CAE and L3 Harris, I got the impression such a deal is at most a 2-3 months away. Weā€™ll see I guess. The great news is that end users (such as Alaska Airlines) are now requesting that manufacturers of full flight simulators now have eye-tracking from Seeing Machines.

Auto

As for Nick DiFiore, who heads up Auto, Iā€™m expecting him to deliver a lot. Volvo for one, VW for another pretty soon. Followed by Japanese OEMs. Oem decision-making has been the main reason for delays up to this point but See does appear remarkably well positioned with Xilinx to grab market share from Nvidia and Mobileye. The fact that Fovio can identify an incapacitated driver makes it a shoo-in for Volvo and parent Geely may well have decided it needs it too.

The US market really needs to hear this in its own accent and so it was good to be told by Paul McGlone that it will be getting a US broker. I do hope it is Morgan Stanley. Iā€™ve long wished to read/hear Adam Jonas extol the virtues of Seeing Machines.

Overall then, while I would have liked more opportunity and time for detailed questions, I feel that further patience will be handsomely rewarded here. Of course, every investor should do their own research.

The writer holds stock in Seeing Machines.

Long live the King of the DMS

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In a recent note from Redeye, its analyst commented that whoever wins VW or Toyota in the second half of the year will be ā€˜King of DMSā€™. He seems to think it may be Smart Eye, whereas Iā€™m convinced it will be Seeing Machines that wins both.

I also believe Smart Eye will soon suffer the embarrassment of Volvo choosing Seeing Machines for its 2021 flagship XC90ā€™s DMS.

Certainly, after a successful fundraise Smart Eye looks ā€˜strong and stableā€™ but as the British electorate knows only too well, the truth will out. Propaganda eventually has to give way to reality. That time has arrived for Theresa May and will very shortly arrive for Smart Eye. Tick tock.

Enough of analogies, Smart Eye even as number 2 will have its share of the cake that SEE doesnā€™t want. China is a big market and I wish it well there. I just hope Chinese consumers donā€™t take a ride in Bytonā€™s M-Byte when it launches later this year ā€” it features SEEā€™s superior DMS.

I also believe that the BMW X5 and Audi A8 will revert to Seeing Machines – for as the Beatle song Drive My Car, could have said:Ā  ā€˜Using a DMS at up to 37mph is all very fine, but I can show you a better timeā€™.

In the auto world premium means ā€˜the bestā€™. In a very competitive market Audi and BMW canā€™t afford to look like chumps v. Mercedes when it comes to safety. That is why auto OEMs are telling, yes telling, Tier 1s to use Seeing Machines technology.

Some will naturally dispute what Iā€™m saying. Still, let those with ears to hear, hear.

The writer holds stock in Seeing Machines.