Higher than normal volume over the week and an increasing price........interesting
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Higher than normal volume over the week and an increasing price........interesting
WHOOPEE, One of my doggy shares is coming to life. I was In third place picking this as my first selection last year in the bad share competition. It might be the last death kicks before it kicks out. macdunk
Or like a lot of things, you could be wrong
One can't complain too much about the 20%+ gain from this share in the last few weeks.
Anna, theres a couple of threads already on WDT outling the company. I don't think starting a new one is fooling anyone... woof woof
Well I applied for an extra 200,000 shares! Don't fancy my chances of getting them but worth a crack anyway. I'm hoping that there were heaps of overseas holders that couldn't apply.
HUDS, The reason that anna created the new thread was to disguise the rubbish that they wrote on the other thread. If you read the WDT threads from start to finish you will see that the same people have been averaging down still bleating the same message. By starting a new thread we might not notice how stupid they were on the other thread. It makes good reading for new investors. macdunk
Actually I started the new thread because I was sick of reading all the rubbish about this company from people and wanted to point out that the price and volumes were both up, nothing more. Also I note that the rights issue was oversubscribed by 130 odd %.
I think they were over subscribed by 30%.
"The issue has closed with entitlements and applications for oversubscriptions
totaling approximately 130% of the maximum shares on offer "
Maths never was my best subject!
Thommo (a doctor of maths)has recently sold his "home" for a rumoured $8.75m
MacDunk can say what he wants about this company But you have to give the company credit for this - A NZ company selling manufactured goods under licence into the Chinese Market.
Re: Order Received and Manufacturing/Sales Agreement Reached
Ugur Refrigeration (Turkey) has placed an additional order for 32,000 AirMoVent commercial refrigeration motors, covering their requirements for March 2006. It is expected that orders for AirMoVent motors from Ugur will continue to be received regularly and that they will also begin to purchase Wellington's high efficiency ECR motors in due course.
Agreement has also been reached with Changzou Match-Well Electrical Products Company ("Match-Well") of China. Under the agreement, Match-Well obtains rights to manufacture and sell Wellington's new ECR81 motor to customers for commercial refrigeration and other products in the Peoples' Republic of China, and supplies motors to Wellington. Electronics and software for all ECR81 motors, including those sold in China, are supplied to Match-Well by Wellington.
Match-Well (www.match-well.com) is an established manufacturer of conventional AC motors and other products. They have identified strong demand in China for motors with high efficiency, due to the current shortages of electricity there.
PGL, That is what is good about a forum like this it gives us a wide range of view points to consider in making our investment decisions. Its your money involved not mine, which makes it that you have to be right mine is only an opinion. macdunk
Duncan, your opinion is as good as anyone's and you have every right to it IMHO
It just occurred to me that this particular news release would give you pause for thought.
You have told us that we shouldn't invest in NZ manufacturing companies because the Chinese would be more competetive at this (so no FPA for you - fair enough I say)
You have also told us not to invest in WDT because the chinese will steal the patents and out-compete for the same product (also it seems, the MD "gets paid too much" whatever that means)
So what do you think of the fact that WDT can sell their technology into the Chinese market and clip the ticket on the way through? - I think that this is pretty cool.
Cool (and clever, you would have to admit) because the Chinese manufacturer that has sole distribution rights in China will know,and will be able to enforce (in a way that no western company could ever hope to) how to prevent its rights from being ripped off by the Chinese.
Did you notice how low the volume of rights trading in WDT was - barely 1% of shareholders chose to sell their rights, choosing instead to stump up with the extra cash - are they all fools in your opinion?
PGL, Good to see rational debate for a change on the forum. Nobody is ever right all the time, so we must expect to get it wrong sometimes. When i get it wrong it costs me up to the time it hits my stop loss then I get out regardless of how right I might feel. All good investors never buy in a downtrend, WDT is in a downtrend. All smart investors have a stop loss, WDT hit every stop loss in the book. To trigger the enthusiasm of the gullable come up with a new product, then exploit them for all they are worth. That is the reason that I selected WDT and CER in the bad share competition and was third. The chinese dont recognise patents like we do. The kid next door has a chinese buggy with a motor that is an exact replica of a honda with no names or numbers. Honda parts can be fitted. Remember the old austin engine in the sixties, Datson made a car with the the exact same motor which was just another nail in Austins coffin. WDT have created huge losses for their shareholders, promised the earth and delivered very little. I really would be very surprised if they ever show a profit I think as an investor who cares better prospects else where. macdunk
If you factor in the rights issue then WDT appear to have been in an uptrend since early Nov, hence my earlier comment about a 20% gain since then. Perhaps a TA expert can comment. My even earlier comment on another thread about it dropping after the rights issue could also be about to come true, as the price does seem to have stalled recently.
Although I haven't seen an announcement, it appears as though extra shares of about 8% of the rights were available to those that applied e.g. pre-issue holding of 4000, rights of 1000, extras ~80.
6.0 mil loss, new order of 400.000 units and more to come. When will wdt become profitable
A quote from WDT's Media Release today puts their latest order for 400,000 motors in perspective.
"The Company delivered in excess of 350,000 motors in the 12 months to end June 2007, a 75% increase on prior year. We have now shipped over 700,000
motors in aggregate, and we expect to ship our millionth motor during the
2007 calendar year."
So, this one order, assuming it is completed, comprises 36% of WDT's total output up to June 2007.
There was also a "Total Integration" order form another US company for "a common appliance that is used in many households, offices and light commercial premises in the United States and worldwide." Confidentiality cloaks this order in secrecy but it sounds like air conditioning or air extraction.
Quite a big jump in production due this year then. A good start but can they deliver? If they can, the numbers should make more interesting reading next year.
This bottom feeder is fat and happy to hold.
Previous thread can be viewed here, since it doesn't seem to have made it across.
I'd like to repeat my earlier note here - that my rough calcs suggest they need to be selling 10m units per year within 3-4 years to be worth current price and would have to do this without raising any new capital.
Of course that's just the long term view. Sentiment can take it anywhere between now and then.
I think it is pretty clear where sentiment is taking WDT, Liz.
Short-term, medium-term, long-term, makes little difference.
It appears that the market agrees with your valuation.
http://h1.ripway.com/Phaedrus/WDT830.gif
I am actually going to get back in to WDT. I know Phadreaus and I have disagreed about this for many years and he is usually right but the momentum is building on the sales front and in I think this may be a good time to buy. Market sentiment is down and I am able to move in. Will invest some MHI profits here. Point taken about needing to sell 10mill units to justify shareprice but that is about 3 orders from 3 decent size manufactures and could happen in the next 2 years. One is on the cards and once one does then everyone has too. You will be bleeding market share if your fridge and washing machine are 3 times as expensive to run but cost the same.
If you have decided that you really do want to buy WDT, Nevl, now could be a good time. Why? Because WDT is just above the previous support level of 30 cents. (Support is often found at round figures) Technically this would be classed as a low-risk entry point.
The usual practice here would be to have a strict Stoploss in place at say 28 - 29 cents. A Close below this would trigger an exit and you would have lost only a small amount should the current downtrend continue. Hence the "low" risk.
A trend-follower would wait for an uptrend before buying. This would take a Close of above 36 cents. Each to his own eh?
if anything was going to signal a change in fortune something like this would be it. THe volumes Lizard suggested to be neccesary for current value to be justified are astounding: still maybe its a share just gone from total dog to not-so-awful?
Actually, price has fallen away from 40cps (equivalent pre-rights) to 31cps since I wrote that original post. I also assumed an investor would want a return of at least 25% pa over 4 years to be bothered investing right now. So it's not as bad as it looks - though I'd be surprised if they can get there without raising new capital!
If it helps, $30 revenue/unit, 10m units, $300m/yr revenue, price/sales=1 (this is based on typical mid-cycle manufacturing and currently compares favourably with companies like FPA or SKL - however, optimists might like to pick higher!), $300m market cap in 4 years time or $1/share - so 25%pa off a price of around 40cps. At 31cps, you can drop the figure down to sales of about 8m units per year in 4 years time.
Sometimes it is the point where a company starts to achieve real commercial viability where the investment dream fails for a while. Reality bites and the market becomes impatient for profits, while a company raises unexpectedly large amounts of new equity to fund working capital. This is where sentiment has a huge bearing on fundamentals, as the lower the share price goes, the more dilution existing shareholders get hit with... somewhat circular. A few good companies with savvy management are able to handle this stage very well and build confidence at the right time. Most struggle. Picking the right time to buy in for the confidence surge when investors regain their faith is not easy - especially in NZ where more than likely Fisher Funds or private equity will be standing by to take a major stake at the semi-final (cheapest) placement.
I remember a few years back people justifying how an Ashburton meat coy was doing well and throwing good money after bad.
Then when they were in the big downtrend, work collegues jumped in to buy so called bargains @ 15c only to see them furthur decline to 5c then more people jumped in for greed justifying to themselves "it can't go much lower their still producing top quality export meat"!
After being burnt by the Jones, Judges, Hawkins, etc after the 87 crash and the Later IT capital & RMG, by brokers recommendations
of bottom end bargains! Well the rest is history, but a lesson well learnt!!!
I have to concurr with my fellow TA man Phaedrus, wait for the uptrend for confirmation, as a knife falls faster than a balloon with good news rises!
WDT is up 19% today. Would experienced investors view this as a sell opportunity in the expectaton of picking up the shares again at a more "realistic" level later?
Closed at 37c. Phaedrus - what do you make of this, given that you suggested earlier that a close of 36c could be significant? Thoughts appreciated.
You could call WDT speculative, but you most certainly could not call it a dog. You could say it was expensive, but who knows, that is afterall just a matter of opinion. There does seem to be plenty of investors willing to pay well north of 30c. Me, I think this is a great little Kiwi company that is just starting to wind-up. Zigzag is willing to give it a go!
Phaedrus. I think your chart needs correcting for the rights issue. Sudden drop from 51 to 39c in May corresponds to this issue. See below. Might make it look more of a sideways trend. since then
I have halved my exposure to WDT mainly due to the current climate taking your "caution advice" as I was too exposed to the NZ market but still believe in the long term principle that motors that save electricity are worth a punt. Will hold the remaining 50% and top up when WDT starts trending up.
Quotation Notice Renounceable Rights (WDTRE)
Further Quotation
Company Name: Wellington Drive Technologies Limited
Prospectus Dated: Proposed to be registered with the registrar of
companies on 17 May
Details of Security to be Quoted: One for Three Renounceable Rights
Issue of up to 76,520,232 Ordinary Shares at NZ 10 cents each
Ratio: 1:3
Issue Price: $0.10 per Ordinary Share
Payable: Payable in full upon application
Dividend Ranking: Pari passu with existing Ordinary Shares
Record Date 5 pm: 18 May 2007
Commence Quoting Rights and Existing ordinary shares quoted "ex-rights" on
the NZX 21 May 2007
Hold ADY FPH NZO WDT LYC TPW NWF KFLWA
Thanks for that Treetops. It is painfully obvious that WDT is not a stock that I follow! Here is the corrected chart :-
http://h1.ripway.com/Phaedrus/WDT831.gif
I'm prepared to call it a dog because that is how it has performed. I've watched it quite closely since Jan 2005 & done some research. Result is I didn't buy. If I had bought and then sold rather than taken up the rights issues my annualised return would have been minus 13.5%
Maybe it won't be a dog sometime in the future? Currently it is speculative as you state. Looking from a fundy viewpoint they are making little progress. I'll keep watching and may climb aboard when/if profitability, margins, ps ratios etc show that there is more than hype there.
Nigel, I don't know what I was talking about. WDT has essentially been going sideways in a trading range all this year (plus last year, really). There is little point in looking for, or commenting on, trends lying within this trading range. If you have made an entry just above a recent support level, you have done as much as you can to profit from this stock.
Not to worry Phaedrus Your efforts are much appreciated as always. WDT attracted me because I have a tendency to let Green concepts sway me like saving electricity. In the water crisis back in 92 30s showers were achieved in our household! Anyway I can't see electricity getting cheaper and the shift to "green" might just make me a profit with WDT one day. I'm also stoically an NZ supporter and can't resist backing NZ companies with something special if the price is right. Appreciate your comments
glennj and can't help but agree its a dog looking at the charts but you obviously see potential or you wouldn't track it. I wonder if I'll see a profit as some overseas manufacturer will see this and snap it up before it reaches critical mass.
I would go a stage further than SectorSurfa and say that WDT have a policy of pushing misinformation to the media in the form of "breakthroughs" that invariably turn into fizzers. Our HB Today carried a story of quite a few inches about a breakthrough that was exactly the same message that they have been flogging for years - since Strathmore dumped the company on its shareholders nearly seven years ago. It ran up around 70cps for a time then.
:p Every dog has its day.
Phaedrus, did you adjust your graph for the cash issue in Nov 05? I suspect not. 1:4, I think it may have been at 10c, but I'm not sure.
Glennj, going back to your example, presumably you wouldn't have bought in Jan 05 when it started a down trend. If you'd instead bought in late 05 when it got into an uptrend you'd now be sitting on a gain of about 50% if you were still holding. You may have even bailed a year ago for the same gain.
Thanks KoOE, not another one! I have made the 4 cent correction and here is the amended chart. Not much different, but worth fixing eh?
http://h1.ripway.com/Phaedrus/WDT910.gif
Once again this dog brings home a bone to the press assn or whoever and they pat his head and show everyone the bone! Last nights HB Today has quarter of a page and a large photograph devoted to the company and their breakthrough into the US market and the huge increase in production that will be needed etc. Surely this is fraud or dishonesty of one sort or another?
Hi Belgarion :)
No, I'm not holding at the moment. Still keeping an eye on this one though - pleased to see quite a few people are still very positive about it.
How is this "fraud or dishonesty? Of course Ross Green is going to publicise what he sees as a major breakthrough for WDT. Isn't that part of his job? Their recent capital raising was set at 10c, around a quarter of the then SP. Normally companies milk their shareholders when the SP is high. Is it odd that WDT didn't? Maybe, but is it fraud or dishonesty? I think not.
What is your problem craic? Are you still carrying baggage from the 80's? We are talking about Wellington Drive, not Strathmore. I have met Ross Green a number of times, and I have a very high opinion of him. He is an intelligent and capable CEO, and of the highest integrity. Since he took over the reins, WDT has gone from strength to strength. Your suggestions of fraud and dishonesty are totally absurd and downright laughable!
Then why has it taken 7 years to reduce the value of the shares by 50%? When will they make a profit? How much has Ross Green drawn in salary over that period? What has he delivered to the Shareholders in that time except for a string of promises? Gone from strenght to strength? - look at the graph for the past few years.
I get it now, you have a basic misunderstanding of the fuction of capital markets. They do not exist to make you and I money. Rather they are an efficient means of uniting those in need of capital with those who have it to provide, at acceptable terms for both.
It's about development and progress really, not profit. Without the profit bit it wouldn't work, of course, but hey, every system has it's flaws ;).
If you want to make money now, you'd better stick to companies that have passed the development stage and are making profits rather than demands on shareholders for more capital. You'll have to pay ten times as much though, and still there's a risk of losing everything.
WDT seems well supported "for a dog" at 37c. Possibly some buyers see some advantage in a "miserly motor" given Helen seems set to announce her scheme on Thursday which inevitably will raise power prices. Turnover not bad for an NZX dog on its last woof eh SectorSurfa. Steady buying over the last week makes me wonder if something is in the wind and the dog has caught a wiff.
More orders for Wellington.
http://www.findata.co.nz/Markets/Ann...e=NZX&n=154066
First time orders from Korea & Finland, and a repeat order from Japan. All in the one notice.
Are they starting to play down the good news so as not to ramp the share price?
I really can't understand the interest in this puppy. From 30 to 40 in no time at all. Can't be the favourable exchange rate. Who is buying up. Fisher? Someone is buying this puppy but who?
The dog is yapping again
What I particularly like is that Panasonic will be paying for the engineering work.
https://www.directbroking.co.nz/Dire...spx?id=1725676
I was concerned that WDT's 'bespoke' approach with these 'Total integration' motors would mean high up front costs combined with market pressure to keep unit prices down.
Starting to sound like they could be a buy,everyone is looking for lower costs electrically I suppose it will be so there is more cheap electric to charge our electric cars when the oil runs out or gets too expensive
I'm not complaining about the share price doubling over last two years.
This dog has become a buy, a lot of people are asking how much is that doggy in the window, wait until the big boys start to move in which will be quite soon I expect.WDT are starting to raise eyebrows and doggy tails are starting to wag.
I know but I've got a few so its even more appropriate
Cool news. This really puts the WDT price on a stable footing and the prospect of selling 10mill units a year with a couple $ margin on each unit means that a profit of 20Mill is not out of the question especially if the US manufacture they are talking too comes on board with a similar deal. Given the hints Ross has dropped over the last 8 months 2009 could be a nice year. Even if they just have Panasonic and the Samsung deal this without any other customer WDT is looking cheap at this price and thats ingnoring any other clients or potential clients!! The other plus is Panasonic will do the manufacturing meaning that WDT just takes the license fees. Well a happy holder again!! Just need that US appliance manufacturer to sign up and we are off.
Someone with some spare cash is buying up large, a bit of a surprise considering WDT has been classed as a worthless mutt by a few on this thread may be its these people who are now buying in.
As I per my earlier post, I think 8m motors per year within 3-4 years justifies 30cps. 10m justifies 40cps. Starting to look like a realistic possibility, so I think the buying interest might finally make sense.
hopefully they will use the revenue to develop new motors. I would like to see what WDT motors could do for the electric car. A lighter engine using less power could work well in hybrids and totally electric as well as be a lot more expensive than their present motors giving a good boost to revenue. Any profits for the next 5 years should be used in RnD and not given paid out in Divis. I hope they understand that. I am worried they will be happy being a niche operator and will sell out to the big boys too soon. The source Vortex deal was an example of that. They now have marquee names as customers with Samsung, Panasonic, Sanyo and Walmart as customers. No need to go to dodgy venture capatialists for credability now.Looking forward to holding these shares for the long term.
Lets see some real ambition as they have a healthy balance sheet now and strong revenues over the next few years.
I can't figure the profit margin. I can just take a reasonable guess based on the nature of the business etc. At this stage of a business, it can only ever be ballpark maths.
Columbus, excuse me if I'm wrong, but I suspect you're just taking the piss. Fair enough. Numbers are just a drifting point on the horizon which give me a sense of direction, but sentiment makes for a crooked route.
I post numbers on forums because they're easier for me to refer to than all my scraps of paper. If they work at all, it's because every institutional buyer or seller will be basing their decisions on figures generated by an analyst who had to guess a set of numbers and who was not an expert in electric motors. Not surprisingly, they tend to make similar sets of assumptions (and errors).
What is your problem Columbus? Craic seemed to be a prisoner of the 1980's. You gone on and on about dogs and mutts. You seem to have some weird canine fixation/fetish. I really think you should see someone about it. Even when confronted by a by a tiger, you still see a dog. It's becoming increasingly obvious that you are barking up the wrong tree. Get some professional help!
No, I have not said that it "would not become profitable". I have said that it would not be worth paying up for the market capitalisation attributed to it unless it was able to achieve sales of that magnitude within 3-4 years. I don't see that as incompatible with what Ross Green has said.
From my post of 30 August:That may be simple (and I've presented the workings back-to-front), but I am happy with that level of calculation at this point in time. You are welcome to examine the numbers and draw your own conclusions as to whether they are fair or not.Quote:
If it helps, $30 revenue/unit, 10m units, $300m/yr revenue, price/sales=1 (this is based on typical mid-cycle manufacturing and currently compares favourably with companies like FPA or SKL - however, optimists might like to pick higher!), $300m market cap in 4 years time or $1/share - so 25%pa off a price of around 40cps. At 31cps, you can drop the figure down to sales of about 8m units per year in 4 years time.
My estimates may turn out to be "millions" out. But the posts of some people earlier suggested they were willing to buy on the prospect of sales which were an entire order of magnitude out.
Hey guys stop bickering. I have wondered where Lizard gets his numbers from but since I'm not prepared to do the numbers myself I've no basis for criticism.
There is a very long way to go before we can talk about profitability, dividends etc with WDT. They have yet to build their millionth motor never mind 8-10m per year. They are still an intellectual property company really, and are yet to prove themselves able to manufacturer milions of motors each year consistently and efficiently.
WDT may well fulfill it's promise and resist the temptation to sell out to the big boys in to the bargain. I'd be very happy if they did. For now, though, it's looking good but there is still a long way to go.
codfish you are right about the dividends but I mentioned it as it seems to be the first priority for any Kiwi company making a profit rather than reinvestment. Also Panasonic according to the news release to the NZ herald is going to manufacture the motors at the new Singapore plant. WDT is outsourcing virtually all its production so upscaling production is relativly simple. That was the whole point of the last 2 capitial raisings. Getting to a stage where WDT acts as an intelectual property company with a small production facility to do small runs of the engines. The sad thing is most of the sales are for the monsoon engine and not the more advanced engines but still the price still seems to be around the $35 per engine. This is good news as the new engines seem to be cheaper than the old style electric motors hopefully hastening the uptake. Ross Green also prdicted profits from the 2nd half of 2008. i suspect the payments from Panasonic will be a big part of this as well as the Total integration project for the American company. The 400000 order announced last week will not hurt either.
A write up / summary of recent WDT activities from the weekend for those who missed it.
Motor co gets a rev up
By JENNY RUTH - Sunday Star Times | Sunday, 21 October 2007
A string of new orders over the past few months, particularly from household names Panasonic and Samsung, has significantly boosted Wellington Drive Technologies' credibility.
The fact that such companies have allowed their names to be published is significant in itself and likely to generate further interest in the company's energy efficient motors used in all sorts of household appliances, from fridges to air conditioners.
In the past, the company has been unable to name its customers back in late August, it announced an order for 400,000 motors from "a major North American manufacturer of commercial refrigeration equipment".
To put that in context, at the end of June, the company had shipped a total of just 700,000 motors it was founded in 1986 but has been producing commercial products only in the past few years.
Illustrating how much production is now ramping up, so far, in the year ended June, Wellington already delivered more than half that total and expects to deliver its millionth motor some time in 2007.
That unnamed US customer will start receiving motors in January next year and Wellington says that customer expects it will need more than 400,000 a year in future as it plans to introduce the motors into other product lines.
While that order will hit the company's bottom line long before Panasonic's order, which is still at the development stage, it was the naming of Panasonic that really got the company's share price moving.
Wellington has been able to name some customers in the past, although they haven't been household names in New Zealand. These include US supermarket operator Kroger and Turkish appliances manufacturer Arcelik Europe's third-largest appliances manufacturer.
"As one credible party contracts with us, other credible parties see that as a tick," says Wellington chairman Shawn Beck. "It's getting to feel a bit more like a snowball rolling down the hill."
Being unable to name customers has been "a pain in the proverbial", but customers wanted to be careful about their marketing strategies and hadn't wanted to give their competitors advance warning of new products, he says.
But it is getting easier and customers are more willing to be named. "Given that it's fairly obvious that energy efficiency is coming, they're not quite so paranoid," Beck says.
As to that energy efficiency, Wellington says the energy savings from that 400,000 order is equivalent to reducing carbon emissions by at least 100,000 tonnes and will have about the same effect as taking 50,000 cars off the road.
The new orders are also making the company's forecast that it will become profitable by the second half of calendar 2008 look more achievable. It has been a profit-free zone all its existence so far, accumulating $34.2 million in losses to June 30.
Gaining credibility is always important for a start-up company and Wellington's was severely dented late last year when a $40m deal to sell 40% to US investors fell over when those investors couldn't stump up with the cash at the last moment.
Unlike many start-ups, Wellington doesn't lack institutional support: it counts Axa, ACC, ING and Walker Capital Management among its shareholders.
Some individuals have also been willing to put their money where their mouths are, including Goldman Sachs JB Were broker Grant Taylor, who owns nearly seven million shares.
Taylor says that despite the fiasco of the US deal, its failure turned out to be a galvanising event expecting to receive the money, Wellington had already started to spend it to speed up its commercialisation process. Rather than just raising enough money to keep going at a snail's pace, as Wellington had in the past, "what it caused the company to do was say, are we going to go for gold?" he says.
The answer was yes; the company placed $12m with six institutions the same day it announced the US deal's failure and raised a further $7.65m from a rights issue this year.
If it does move into profit next year, that could be the last time the company needs to hold its hand out for more money.
Although it's always possible that, having proved itself over the next year or so, Wellington Drive Technologies may decide to speed up development even further.
# Jenny Ruth is a freelance financial journalist and a columnist for the Independent Financial Review.
This the key with the prices of oil and coal going skywards and the whole carbon credit thing the most efficient motors are the motors which are going to be utilised where ever possible. Another key factor is that by being more efficient they are lighter which means less use of copper and steel, which are resources that are also heading up in price.
The average electric motor states its power factor on its name plate usually around 0.85 so any improvement on power lost is money saved, I don't know what the p.f. of the average WDT motor is but it will be difficult to get it up much more so if they have managed to do this then they will be very much sort after and now that major companies are showing interest and opening their wallets I fully expect the sp to go up dramatically soon.
really depends which motors your looking at scuffer.
have a read of some wdt reports on motor efficency and which markets their targeting, or even google it. mainly in low power air conditioning, refridgerators etc..
the basic gist is, that wdt are targeting the efficent motor market less than 1 hp equivalent. you say the average motor is 0.85 and hard to improve on. i think wdt is competing in market where the motors are lower power ( <1kw ) and when 'average' or 'normal' motors are in this range, they become highly inefficient. wdts motors however are one of the most efficient making them very attractive.
here is a page with a little table which show efficiencies of motors improving with more power. you will then get where wdt a positioning themselves...
http://www.psnh.com/Business/SmallBusiness/Motor.asp
about the shareprice rising dramatically? its already got a reasonably large market cap for a company not yet turning a profit. no doubt they are also experiencing a very tough market with the nzd so high...
i guess its all about your required/expected rate of return...
Interesting I didn't know that thanks upside.
Does anyone have any pricing/cost info for wdt units? A saving of US$40M per year for 400,000 units equates to US$100 per unit per year. A 350W unit running 24/7 will consume roughly 3000kWh of electricity per year. So a $100 saving on only 3000kWh must represent a significant increase in efficiency and I can see the attraction of these units to the end retailer.
Looking through their last report they seemed rather worried about the kiwi dollar being too high. Fact is it probably not going any lower for quite sometime .
Ratkin I agree the US dollar is not looking to recover anytime soon, however, WDT have indicated their intentions to expand within the european markets with several sales reps recruited for this task. I suspect the NZ dollar will weaken against this market providing some gains to offset the reduced US market profitability. Some of their first international sales have been to european/asian based companies...
they will still make a loss this year, so no profit as it would be said.
looking good though, i like the potential but will the shareprice move north at a good rate in the future?
if it gets more orders in timely fashion it should do well.
Tell me what you expect from this stock in terms of revenue, profit, shareprice in the future.
Lizard? has given guidelines to what he thinks profit should be in the future to justfy a company with a market cap of over 150mill.
They havent had revenue break 5 million a year, they compete in what will be a very competitve market, profit unfortunately has never been spoken from the lips of the CEO or chairman. They shareprice was 60 cents 3 years ago, options have been handed out mind you...but still nothing exceptional.
Im not doubting this stock, but it will be consistently hard work for the company.
Your of view on how you see it unfolding welcome, or anyone else for that matter.
Teaches me to do my research, I did see they were in the Top 50 thing the other day, but it didnt state there what their revenue was in the paper.
A pity that Colombus couldnt point that out to me earlier, I'm guessing he is a current shareholder? Colombus, please disclose and dont leave little riddles - you seem to do a bit of that on this thread...
Also, you going to disclose your figures for revenue, profit, and shareprice over the next 12 months?
According to "Unlimited" magazine, WDT came in at no.18, with revenue growth of 400%.
I think Ross Green has stated that he expects profit in the second half of next year. As to share price I expect it to remail in 45 to 50 cent mark for the forseeable future. However this is a announcement related share and the price will rice and fall according to sales announcements not any fundamentals.Still as I have stated before this company along with Rakon probally has the most potential over the next 5 to 7 years. A 1% market share in its field is $1bill in sales. That is small electric motors. Given the need to cut energy costs and the economics involved I think this is possible in 5 years. Whether it will be acheived thats another story.
This may be of interest to anyone. Even gives figures for the US market
http://findarticles.com/p/articles/m..._63607835/pg_1
Soon they will have bagged more orders since the rights issue than they have sold in total before it. :D
Hill Pheonix are taking 180,000 units per year for starters. Impressive, yes, but it isn't all good news...
" Notwithstanding the solid revenue increase, the operating loss for the year increased from last year. This was partly a result of delays in finalizing contracts and partly a result of the Company's decision to accelerate its overall activity levels in order to capture as much of the market opportunity as realistically possible. Nevertheless, overheads have been well-managed and ended the year in line with the planned increase, with a doubling in offshore based infrastructure costs and New Zealand costs managed to less than a 20% increase.
We also saw an adverse impact of $0.7 million, due to revaluation of US dollar denominated assets, namely cash and receivables. The appreciation in the New Zealand dollar also reduced our reported revenue growth, essentially all our sales being denominated in Euros and US dollars. As most of our stocks are also purchased in US dollars, we were hit twice by the New Zealand dollar appreciation. Recorded margin improvement was reduced, due to stocks being purchased earlier in the year at less favourable exchange rates than when major billings were made.
Although we would naturally prefer the Company's financial results to be better, the results have to be viewed against the stage of rapid growth the Company is in and the current volatility of exchange rates.
Cash balance at year end was about $13 million, reflecting the successful rights issue concluded in June and helped by a small reduction in working capital compared to the previous half year. However, working capital requirements will continue to show significant variances over the next few years as we deal with early growth of new customer accounts and the introduction of new product lines. We continue to expect that working capital will decline relative to sales levels over time, but in absolute terms we expect that working capital will rise and that investment in working capital will remain substantial for some time.
Your Board and senior management are currently considering some important decisions. On our current path, we are confident that the company can move into profitability in the second half of next calendar year. However, some
large opportunities are on offer. If properly exploited these could lead to rapid growth of volumes of both standard products and those developed specifically under Total Integration programs in 2009, 2010 and beyond: volumes that would be substantially higher than present expectations. Capitalizing on these opportunities, as always, has associated up-front costs and investment that would potentially delay the Company's transition to profitability. This, however, would be balanced by substantially greater upside in later years. Should we choose to make any material changes to our plans we will communicate these changes (and their associated financial outcomes) to shareholders at the time. "
I imagine some will take this a cue to exit the stock for a year or so. Another Capital Raising is in the offing or maybe a cornerstone shareholder. I'd prefer the former though it won't be 10c a share this time around!
They should stop pussyfooting around and go for all the money they need to do the job. Be bold WDT, go for gold and don't sell us all out to the first big player that comes along with "tomorrows price today" for us shareholders and six figure pension plans for all the directors!
CF
They will be asking for more money soon
This company has already been approached a couple of years ago about being taken over. The management said they weren't interested, and at that time management had a controlling stake. I certainly hope they are NOT taken over as I have been waiting patiently to get the benefit of all this investment in time amd money! I still think this is one of the best potential investments in our sharemarket at the moment. Go WDT!
Well, I was wrong. If people are cashing up they are doing so at 50c :).
Not sure about Ross Green's maths in the agm speech...
Ongoing sales growth of 150% per annum would mean selling 530 - 1300 million motor units by 2015 - 2016, not 30-40 million. :p
Though 150% for just the next 4 years (13.6m units) would be enough to meet my baseline for a worthwhile investment at current prices.
Recent announcements are increasingly making this investment proposition stack up for me. I have bought a small parcel and may look to add on any dips.
You got this figure based on the 500 per day quote? Do you know for sure that Hill Phoenix make their products (and therefore use WDT motors) 360 days of the year?
My calculations were done at a more conservative 5 days a week which comes out to 130,000 units per year which isn't too bad. This would provide revenue of approximately 4.5 million.
Hopefully in 2008 we will see another announcement that Hill have ordered more units since they have only ordered another 80,000 so far. Still, that is a good increase over the 50,000 ordered the previous year.
Yep I'm sure that's how I read it. Can't say I'm moved to phone them up to find out exactly what they meant.
Another announcement, not Hill though. As usual they can't say who but it sounds big!
"The contracted value of the development and production engineering exceeds $NZ1.5 million with products being launched by the customer throughout 2008 and early 2009. Wellington expects product revenues from manufacturing to grow steadily from 2009 onwards in this long-term agreement. "
CF
Yes, another impressive stride forward towards justifying the current market cap. :)
Here is a ShareChat article that has additional info on todays annoucement:
WDT signs $1.5m agreement
Wellington Drive Technologies said today it had signed a $1.5 million long-term contract to provide its efficient motors to an unnamed international company.
The company will launch the products containing the motors throughout this year and early 2009.
Manufacturing revenue was expected to grow from 2009 from the long-term agreement, WDT managing director Ross Green said.
"This agreement is significant as Wellington's technology will be in products available through an established, global sales organisation," Green said.
"These distribution channels should enable fast revenue growth as the products come available and accepted by end users."
WDT had signed a confidentiality agreement covering the name and other details of the company, to protect both parties' competitive positions, he said.
The company was not a household name, and not based in the United States, but was well-known in technical circles, Green said. It had approached WDT.
"The sort of products that they're dealing with are used everywhere, and essentially they're everywhere as well."
WDT had spent nine months on development work last year anticipating the contract completion, which would be recorded as revenue.
WDT is not greatly affected by the high New Zealand dollar as it produces mainly in China and Malaysia. The Auckland-based company was running at capacity, and was expanding so it had an adequate buffer.
"I think really what we're seeing is the fact that we've been out in the market with truly commercial products for a couple of years, and I think in hindsight we're going to say this is the year when the company began generating business on a truly commercial scale," he said.
"Institutional placement of 31 million ordinary shares... At the agreed price of 41.5 cents per share, this raises just over $12.8m in new capital. After the transaction, UBS will own 9.2% of the shares on issue"
https://www.directbroking.co.nz/Dire...spx?id=1839310
WDT's wish list...
"The new funds will be used to;
- Strengthen sales, marketing and in-market support within the sales organisation, primarily overseas;
- Improve the Company's ability to deliver products in volume rapidly,
including the establishment of a stator manufacturing facility in Singapore
and the implementation of systems and processes appropriate for high volume supply direct to leading appliance manufacturers in North America, Asia and Europe ("Tier 1" supply systems);
- Reduce the time taken to move new standard and special-purpose Total Integration designs from prototype to full production status
- Bring forward the next generation of research and development to
extend Wellington's innovation lead and to access new market areas. "
Not sure $13m will cover it, how much does it cost to build a small factory in Singapore? I like the ambition but expect the market to focus on the fact that 'break even' has now been pushed out another year.
I like this I really would like to see them go for it. This piece meal approach though is fustrating and I would love to see them try to raise closer to 100mill in one go. Remove all doubt and be able to do what they want when they need too. Still having UBS on board is great especially in this investment climate. They are taking a punt on new technology in a falling market. If that is not a vote of confidence what is?
I will be topping up though out the next few years so in the end I will have WDT as my largest investment. I still think this share will be close to $2.00 about the end of 2010 and heading to $3.00 by 2012. I have already brought another 10000 this week.
This may not be the end of it. I imagine UBS weren't the only ones WDT have been talking to and no reason to beleive that all discussions have been concluded already. In fact I wonder why UBS didn't wait a few weeks given the current climate?
Capital Raising from us shareholders is now unlikely though IMO.
Todays news means that over 190 million of the 337 million shares issued will be held by institutions. That is a pretty large chunk for a "start up" company isn't it?
That is true. Isn't it also true that this is a good thing? Better than leaving it to the last minute and either having to slow down expansion or cause customers concern about the state of the balance sheet. Nothing like money in the bank to make customers comfortable about your tenure. That is one of the things the failed capital raising in 06 was meant to resolve wasn't it?
I think this is a confirmation of the plan outlined at the AGM where they said they had a choice of Profits in 2008 or to keep investing in expanding the company for larger profits in 2010 and onwards.I am glad they have gone for this and will keep investing. The potential is too big just to go a short way down the road and then pull back just for small profits. We are in a go for broke situation and I think this is the right call. I think there will be another capital raising in the next few months. But there is probally going to be one more major announcement by june.
That is quite a specific comment. Why are you expecting only one announcement by June?
Considering their ever increasing sales team, the growing demand for EC motors at reasonable prices and the reducing times from first contact to an announcement of sales, first stage of or progress with a TI project can't we reasonably expect more than one announcement before June? Looking back over the past 12 months there was an announcement once a month on average of decent sized sales or new/progressing integration projects.
What ya think?