Good evening from Germany,
Long term valuation (7+ years) based on a purely theoretical subjectivelyinterpreted scenario with several assumptions:
1.) 5 applications/productswere chosen to be included in the consideration.
2.) Apotential Brainchip market share / pick rate of 20%.
3.) Thenumber of IPs/chips per application in the automotive industry is 10 pieces,for the rest 1 piece.
4.) Aprofit of $10 per IP/chip is expected.
5.) The PEfactor for company valuation is assumed to be 20.
6.) Calculationbased on 1.7B shares outstanding.
Calculation:
I haveattached a summary as a screenshot. Ihave put sources for the annual sales figures at the end of the text.
Automotivemarket:
About 66million cars are sold annually. We got here by Mercedes a first impressionwhich applications can be covered by AKIDA. I expect speech recognition, facerecognition and processing of information for autonomous driving. Certainly,there are significantly more applications in the automotive sector, but thisshould serve as a starting point. The estimated 10 IPs/chips per car are alsochosen relatively cautiously here. Accordingly, the potential is (66 M * 20% *10 units) a total of 132 million units per year.
Smartphones:
In myopinion a potential link to one major smartphone supplier would be a milestone.Approximately 1.5 billion cell phones are sold worldwide in a year. With anestimated market share of 20%, I calculate a potential of 300 million unitssold per year here, assuming one IP/chip per phone.
Refrigerators/ washing machines:
Dot joiningto LG + Peter's article (what to expect from the AI market in 2022) + thepublished Youtube videos by Brainchip make me include these two applications.Historical sales volumes of 236 million (fridges) and 170 million (washingmachines) lead to a potential annual volume of 47.2 million (fridges) and 34million units (washing machines) at 20% market share and one IP/chip perapplication.
SmartSpeaker:
The voicerecognition function seems to work, according to Mercedes. Furthermore, aconnection to Amazon/Apple seems to be an option in my opinion. With 166million units sold per year, a 20% market share for Brainchip results in apotential annual volume of 33.2 million units.
Totalunits / a
In total,we thus get an estimated potential of (132+300+47+34+33) approx. 546 millionunits per year.
The high-volumedemand quantities are met via IP, so I don't assume large material/productioncosts, etc. I have in mind 95% margin for an IP sale. The potential profit perunit is therefore assumed to be $10.
Profit/ a
Multipliedby the assumed 546 million units sold per year, we arrive at $5464 million in profit($5.464 billion).
MC
Multipliedby a PE factor of 20, we get a company valuation (MC) of just over $109 billion.
SP
This inturn corresponds to a share price of more than $64, based on 1.7B sharesoutstanding.
Additionalpotential applications/products/industries
In additionto this, there is an almost infinite number of other options that couldpotentially drive revenue growth for Brainchip. Here is just a small excerpt:
· Health- hand held devices
· TVs(215 million units 2021)
· Desktop/ Notebook (341 million units 2021)
· Headphones
· Smartglasses
· Cybersecurity
· Maintenance(Construction, Cars, etc.)
· SmartCity
· Powerconsumption optimization for server
· Drones
· Military
· NASA
· Smartrobotic
· Severalindustry applications
· Thingswe have absolutely no idea of that they will ever exist
· etc.
Sourcesof sales figures:
•Global car sales 2010-2021 | Statista
•Smartphone sales worldwide | Statista
•Global: refrigerator sales 2012-2025 | Statista
Alexa, tell me about the smartspeaker market in 2021 | S&P Global Market Intelligence (spglobal.com)
• Washing machines & dryers unitsales worldwide 2013-2025 | Statista
•Global TV shipments 2015-2021 | Statista
Canalys Newsroom - GlobalPC shipments pass 340 million in 2021 and 2022 is setto be even stronger
In the caseof Statista sources, data may not be visible without payment. A Google searchwill confirm the figures given relatively quickly.
I am ananonymous poster. DYOR. No financial advice.
FKE
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