Hey guys,
I just got off the phone with Kobi today asking him a whole bunch of questions, so I'll stop by here to give you all an update on what we have discussed and share a few things on what I have researched over the past few weeks.
Firstly, I was informed that Kobi has just returned from a conference in Paris, in which he met with several representatives and senior executives from big automotive companies such as Renault-Nissan-Mitsubishi Group, Honda, Toyota etc. He was really excited to be a part of the event where "literally everyone was talking about electric vehicles for the future".
https://www.calcalist.co.il/conference/articles/0,7340,L-3746890,00.html
(The page is in Hebrew, for those who can't translate it, below is a summary of Kobi's interview)
Ultra Charges
Charging the battery quickly to Autonomous
Ultra Charge, which is in the field of lithium ion batteries, has developed technology in the field of rapid charging. "We are currently in the process of creating solutions for rapid battery charging. The goal is to allow charging in six minutes, "said CEO Kobi Ben Shabat. "We use a substance called titanium oxide, which can be loaded at high speed." According to him, today's rapid charging creates problems with the battery. Tesla, for example, prohibits charging faster than twice a year. "In addition our battery is cobalt-free, so it is relatively inexpensive. The cost of materials is about a third of what is outside. We are without much cobalt, without a lot of nickel. Here we are looking for strategic partners and strategic co-financing. We are traded on the Australian stock exchange. Here we would like to meet in practice with anyone who we can and sit here with manufacturers. We are looking for strategic partners that will enable us to develop a product that suits a specific customer."
"The battery market is a huge market, and every manufacturer has its own requirements. Every manufacturer knows how the batteries look to him in a vehicle, with an electric scooter, meaning we have to develop a product that suits a specific vehicle manufacturer. This field is very competitive and very difficult to enter. If you found one strong and good customer, it could be enough. Car manufacturers are talking about the fact that most models will be electric in 2030, which is a huge potential. In the field of biplane, there is also tremendous potential, and we are not limited in terms of the field. For example, I can sell only one car manufacturer, but also a motorcycle manufacturer."
Next, here are the key highlights of things I discussed with Kobi:
Thoughts on current share price
- He said he's happy on the inside (with what the company has achieved in the past 12 months) but very disappointed on the outside (like the rest of us) with share price being where it's at. He went on saying that tech companies in Australia are under a lot of pressure, with investors wanting to see revenue and profits in the shortest amount of time.
- His goal is to build UTR into a billion dollar company in the long term and not settle for short term small revenue gains, and this has presented great challenges under the Aussie market where not a lot of investors have the patience.
- Strategic partnership agreement with big companies can often 2 - 5 years before it gets finalised into a revenue generating deal, but like what Kobi has said (highlighted above), if you found one strong and good customer, it could be enough.
Leclanche project
- As mentioned in previous update, project is in stage 2 however there's no update on Leclanche's side of things. In this agreement, Leclanche is the customer and UTR is the supplier, all the company can do is to supply what they need and wait.
- In fact he said that this has been a difficult project for the company. Mainly due to the fact that Leclanche, as a publicly listed company, has been struggling with its investors pressuring them on revenue growth, which has caused them to shift their focus to near term revenue generation, putting on hold all their other developmental projects.
- As you can see in their recently published 1H 2018 report, their operational loss was -$22m francs (equivalent to about AUD $31m, yikes!)
- (Source: http://www.awp.ch/index.php/fr/suisse.html?pick=-2033793879)
Production agreement with PTG in Indo
- Currently finalising details, the good thing about this deal is UTR will not have to pay a cent. Once PTG secures $5m orders (which they will easily), the company will then contribute up to $3.5m (essentially 70% interest on PTG's orders) to build a production facility for future manufacturing, which will be really beneficial for breaking into the asian market down the track
CR in the near future
- No immediate plans, focus on "non-dilutive" measures like the agreement with PTG and application for grants etc.
- It's also difficult with share price currently trading at its all time low, Kobi understands that and will avoid raising capital at such low prices if possible.
Lastly, Kobi mentioned his "main candidate" is China. Discussions with potential customers are ongoing, there's nothing finalised yet but he wishes to continue to sign more agreements which will bring in near term revenue for the company without using much cash while focusing on the long term goal. He will provide us an update as soon as he can.
Now moving onto my research, like myself I guess everyone has been dying wanting to know the answer to the big question - "who is selling their shares at these prices?"
Well here it is but first let's have a look at the fundamentals of the company.
Here's a recent article highlighting the ownership summary.
https://finance.yahoo.com/news/could-ultracharge-limited-asx-utr-045201718.html?.tsrc=rss
- Instos 1%
- Private companies 15%
- Individual insiders (directors and board members) 27%
- General public (retail investors) 57%
As you can see general public holds the biggest %, which indicates the day to day fluctuations are generally caused by us retailers. Directors and other board members are still holding their shares from listing (which were issued at 5c), with Kobi buying another 3m on market at 1.6c recently.
Broker data for the month of September:
For those who have no idea how to read it:
- Commonwealth, CMC, IBA etc are retails like us
- As you can see Pershing is the main seller, and there is a reason for their exit (see my comments below)
- While they are dumping, there are other top tier brokers Bell Potter and AIEX picking up cheap shares at 1.4-1.5 which is a good sign
Now not sure if anyone know but Pershing's Australian and New Zealand operations have been struggling as of late.
Pershing Securities reported $31.6 million revenue and booked a $12.4 million loss in the year to December 31, according to accounts lodged with the corporate regulator.
Revenue dropped from $32.3 million in 2016, while it swung to a loss in 2017 thanks to hefty consultancy fees and an increase in employee expenses. The biggest items in its financial statements is the capital required to clear trades. It had $272 million in cash and equivalents on its balance sheet and $464.5 million in assets.
Source:
https://www.copyright link/street-t...view-sparks-ownership-rethink-20180815-h13zks
They are basically exiting with a loss at whatever cost in order to regain their capital. They sold out in many other small cap stocks too as far as I can tell, unfortunately UTR is one of them and this has nothing to do with the company.
Conclusion (my thoughts)
I'm holding this stock with a long term view. My conversations with Kobi has solidified my standpoint and gave me confidence - UTR started with part of a product to now offering a full battery solution with 2 revenue generating deals on the side in just under 2 years. The company has a product that's in the limelight of a booming EV industry, like all other shareholders patience is a big thing to ask, as much as I would like to see an inflow of short term revenue, I would much rather UTR gets developed into a billion dollar company in the near future.
Hope this info helps. As always, if you have any questions feel free to leave them with me, I don't read HC often as I spend most of my time researching if I'm not at work, but I would do my best to stop by and post updates here
Hez
