Fordo
05 Jun 2018
Re: My AGM report Hi MuzzleYes. However, it is worth considering that P/E is perhaps a rather unreliable measure of whether or not a business is good value for small growth companies where the markets they operate in are going through a step change.
shabby 2 sox
05 Jun 2018
Re: Is this Apple/Dialog Semi'r. news re... 'we are actively engaged in VCSEL qualification programmes with over 10 additional key VCSEL chip manufacturers''The AGM statement notified us that a further ten chip manufacturers are now going through qualification with them'.Can anyone elaborate on what is involved in a VCSEL qualification programme and what the director's expectations (which are being met) are in respect of these programmes? Presumably contracts to supply wafers for VCSEL applications but is it reasonable to assume any signed up will be covered by NDA's i.e. we are unlikely to know the details?
Muzzletoff
05 Jun 2018
Re: My AGM report Stockpedia has a forward looking PE of 25x for IQE.Arguably there is an average for tech stocks of 22x?If that is the case, it suggests that the current share price isn't going to do much more unless IQE get an earnings upgrade, or unless some (pleasant) dramatic event occurs.Fordo is suggesting/implying a longer time span may be appropriate for IQE shareholders, which until an earnings are upgraded seems a broadly sensible view.
Dave Sweeney
05 Jun 2018
Re: My AGM report Hi FordoSorry to miss meeting you...next year perhaps. I only caught part of your question and that’s why I didn’t include David Grant’s response in my resume. You made a great point and as you say you were not brick- batted, I agree entirely with your thesis.Thanks also for your excellent thoughts on ‘reactor orders’, my thinking entirely. As Drew Nelson clearly intimated- IQE are waiting for the market, the market is not waiting for us. IQE as the predominant VCSEL wafer supplier, seems to be in a very sweet spot in the market-place.
oliver101
05 Jun 2018
Re: My AGM report Thanks for that Dave. Not least for the correct frequency of your posts, something one or two others could learn from (there is a perfectly respectable case for a cautious view, but a more thoughtful and more occasional approach would be more effective).I think we enthusiasts need to accept that 2018 results may be merely good. But the longer term future looks terrific and is getting nearer. It is hard to see anyone going far wrong with buying at this price. Pondus et Mare.
Fordo
05 Jun 2018
Re: Is this Apple/Dialog Semi'r. news re... Jez"As far as I am aware we have no proof that Apple is a customer."Absolute proof is probably unavailable. However, it is well established that Apple buy the VCSELs from VCSEL manufacturers under NonDisclosure Agreements who may be purchasing the wafers from IQE or somewhere else. But why else would IQE's sales of VCSEL wafers suddenly take off at the time of the introduction of the iPhone X and if IQE are not the wafer manufacturer who else in the world can produce this many wafers for VCSELs in this period of time? Absolute proof may be not, but on balance it is highly unlikely that the majority of Apple's VCSEL supply is using wafers coming from somewhere else."Apple has indicated that it wants to take its chip production in house."I don't think that is the case. They have published a commitment to take some production from Finisar a separate company. Dual sourcing is prudent. But there is an increasing amount of VCSEL business to go round. At the AGM Dr Nelson indicated that their contacts with Android phone component manufacturers suggests many of those will go down the VCSEL route too. Furthermore there are other nascent markets such as LIDAR, HAMR drives etc. Thus, Apple dual sourcing is unlikely to be a big issue in the longer term or even in the short term. Consider that it will take Finisar a year or more to get their factory ready and qualified even if they do not run into any technical difficulties."The situation has not changed significantly in at least 6-9 months"Not really true. There is more visibility about the future as the company have given growth guidance by market segment in their annual report. The AGM statement notified us that a further ten chip manufacturers are now going through qualification with them. The auditors have been changed and no skeletons come out of the financial or tax cupboard despite the mud slinging by certain parties. The new factory and new machines are on schedule so there is now more certainty in that area too.It seems to me that over the last 6-9 months the picture has become significantly clearer.Exponential growth? No, that was always someone's pipe dream, or something that existed for a very short period last year. But if you can reliably find longer term exponential growth with future certainty at a reasonable price then that's a truly rare thing as that is not going to be reasonably priced for more than a small moment in time in my view.
Fordo
05 Jun 2018
Re: My AGM report Thanks for that Dave.Sorry I didn't get to meet you. You may have heard me raise the issue that the threshold of 6% CAGR in earnings to qualify for a payout under the LTIP is too low if they are confident that these high growth opportunities will come to pass. I got the impression that Sir David Grant has some sympathy for that view and will consider the point seriously. Another speaker from the audience made the very useful point that restating the hurdles for how the LTIP pays out to higher growth rates would send a very strong message to the investment community that the board really truly believe that they will achieve high growth rates. So, if you are reading this Sir David, or Chris Meadows, hopefully you won't just quietly forget about it!Dave, I think you've covered most of the topics very well and I don't want to duplicate that. So, I'll just make a couple of further points that might be worth elaborating.There was a feeling in some questions that the investment in new machines seems too slow to be in line with the fast growth in the market for the companies products. Dr Nelson explained fairly well that it is a balancing act and goes hand in hand with what their customers are committing to. I think that this is the correct approach. It says to the customers, don't expect us to have capacity just waiting idle for you to take up. One doesn't want to be in a bargaining position where the customer knows that you have a high amount of excess capacity that you are desperate to fill. Also, without full detail of the production rate from each machine for each product we don't know quite what their capacity is going to be. On the whole I don't think we need to worry much about this.I liked the bits in the presentation about developments that are intended to move them up the value chain a bit further but I do think they will take a couple or years to start bearing any significant fruit. I am a bit sceptical that it is going to take so many LIDAR VCSELs per autonomous vehicle too.Overall, the atmosphere, apart of course from the untimely death of the CFO, seemed quietly confident. Someone sitting next to me did point out that without Phillip Rasmussen the board are looking like they need some younger blood and gender diversity for balance.My lasting impression is that the grey area as always is how soon the high growth opportunities manifest themselves in revenue and profit growth. I think it is coming but more slowly than the majority of people expect. So my expectation from here is that this is going to be a very nice long term good but not spectacular growth story. Patience will be rewarded big time. Those looking to make a killing over a period of a year or less may well be disappointed.
gretel
05 Jun 2018
Re: My AGM report Terrific report sweenoid, many thanks from me also.The licensing potential is certainly intriguing....Great to hear about the interest from American investment funds and the efforts being made to bring more on board. If this continues successfully for long it won't be long before there will be an almighty problem for any shorters as the American buying ammunition will simply sweep them away.
Hyperproject
05 Jun 2018
Re: My AGM report Thank you for that Dave.
Dave Sweeney
05 Jun 2018
My AGM report A rare foray hereMy AGM report-sit down, make a cup of tea.If anybody saw two middle-aged men wandering circuitously down Penarth High Street last night I hold my hands up and admit that Ken ( Hammerd)and I were responsible.! The AGM this year was a very successful affair, I took no written notes so the following is a summary of what I can recall after rather a boozy( understatement) post AGM, please can other attendees dot the I’s and cross the t’s and fill in what I have left out ( thanks Xylos for your contributions)First things first, it was a delight to meet so many other investors- too numerous to mention, The usual number count for previous AGMs was approximately 6 to 10, so I’m sure that management were relieved that they had hired a large venue for this year’s meeting, because it was extremely well attended (60-70?).Yesterday’s RNS was a very welcome start to the day, with 2 highlights for me, 1st the obvious statement “ we are actively engaged in VCSEL qualification programmes with over 10 additional key VCSEL chip manufacturers, which are progressing in line with the board’s expectations”, I bet anything that no one reading this can name half of those New customers 
, I certainly can’t, that list must occupy almost the entirety of worldwide VCSEL firms,remember that list WILL NOT include Lumentum and Himax and Finisar who ( imho)we are already supplying ( the 1st is the biggie). I Will come back to this when I discuss competition later in what is likely to be a very long read.The second main highlight for me of the RNS was the future appointment of Phil Smith to non-executive Chairman, which in large part answered my intended succession planning question.Phil Smith was my preferred first choice and I’m absolutely delighted ,as everyone should be, this guy is high calibre.He was CEO of Cisco for many years , he has a huge reputation in the industry and is widely respected and I can’t think of anybody better suited to replace Godfrey Ainsworth in the chair. As a new non- exec last year and now a veteran, he did his best to introduce and chat to as many investors as possible, a top class acquisition as a future chairman. In my conversation with him, he made his ambitions for the company clear, his enthusiasm and optimism was obvious and infectious, he is a good and natural communicator and will be a massive asset to IQE going forward OK, the meeting and in no particular order, 1st the all important ‘competition’ question. To be honest and frank, our CEO basically forensically ‘dissed’ them, whilst demonstrating no complacency at all. He reiterated that the ‘outsource model’ is the way to go, for chip manufacturers and the barriers to entry. I have talked a lot about this in the past, so won’t repeat myself, but the key message to take away is the following, and imho this forms almost the entirety of IQE’s competitive advantage in the next 5 years. IQE is WINNING market share from its competitors in the ‘wireless’ division, despite the opposition being aggressive on pricing!here wafer epitaxy is relatively simple, each wafer having only 10-20layers. What hope have they got of ‘stealing’ IQE’s VCSEL business where wafers contain near 400 layers? , and are magnitudes more difficult to design and manufacture, whilst IQE are pinching their bread and butter business from under their feet? I would discount serious opposition emerging for many years to come...and so does the CEO, he went through every competitor they have and explained why that is the case, I thought he was rather persuasiveNext,Patents and the possibility for new licensing revenues 
IQE have acquired a rich vein of patents, in 3 interesting area’s,cREO and most recently Quasi Photonic Crystals (QPC). This advanced materials technology complements the Group's organic development of NanoImprint Lithography ("NIL", and broadens the potential application of NIL beyond IQE's current focus on advanced DFB lasers. Indeed,
winningstreak
05 Jun 2018
Re: Did anyone take in the factory tour at t... David Sweeny said he would go, so expect a report from him.ws
23Jez
05 Jun 2018
Re: Is this Apple/Dialog Semi'r. news re... As far as I am aware we have no proof that Apple is a customer. Apple has indicated that it wants to take its chip production in house.IQE has multiple good products.The situation has not changed significantly in at least 6-9 months. The share price is trending side ways. When it starts making a profit over time it may be a stock to buy for income/tech exposure but its share price is unlikely to increase exponentially, as in the past unless there is a takeover.This is my rational analysis but in an increasingly chaotic world I could well be wrong.DYORBest wishes 23 Jez
Stoater
05 Jun 2018
Did anyone take in the factory tour at the AGM I was wondering if any of our BB contributors went to the AGM and took the guided tour of facility. It would be interesting to get some feedback from both the meeting and the tour.
winningstreak
04 Jun 2018
Re: N+1 Singer: Buy with 181p target Brown Owl - Close one eye to negative views and open the otherto positive views....for an unbalanced view.ws
old brown owl
04 Jun 2018
Re: N+1 Singer: Buy with 181p target Good informative posts from Gretel today. Appears from a quick scan that the gutter brigade are still swamping this BB. I just skip past those and pick up the ones that have something intelligent and new to say.
