Hi UpxdnThere are a few issues here to unpack. 1. The technology...

Hi UpxdnThere are a few issues here to unpack.

1. The technology is quite unique and subject to patents via their collaboration with the Deakin University. See IP specific info here: https://www.pof.com.au/carbon-revolution-develops-world-leading-carbon-fibre-wheel-technology/

2. Regarding shipping costs, it is true that container and freight costs have more than doubled since August last year. This impact flows through to the customer, depending on the Contracts in place. I would say that the OEM’s are purchasing CFR (delivered to local port of destination) with the shipping component variable. It has to be in this climate and at worst shared between both parties. Since the OEM’s have delayed I would say the cost of sourcing alternate cargo freight would make the OEM fully liable however in the spirit of partnership this may still be shared. I certainly wouldn’t have an issue with this good-will negotiation as I am in CBR for the long haul. This is my opinion only. Regardless, the container can fit a high number of wheels due to their configuration and weight. Any extra cost can be spread per unit cost - but there is still an impact. Normalisation of these container and freight indexes is expected sometime in H1 22FY.

3. Supply chain impacts for semiconductors is impacting the ‘just-in-time’ manufacturing of the OEM’s and is having an impact - although this is temporary and they have just shifted their position in the cue. Last announcement indicated July 2021 resumption in production.

All in all, if you are in for a quick trade there is no quick multiple here in a few months, but at these prices I would envisage a multi-bagger a few years from now.