CybAero AB develops, manufactures and markets autonomous unmanned helicopters (VTOL UAVs) with associated sensor systems for use in both civil and military applications. CybAero was founded in 2003, but the foundations of its business were laid in 1992 through a research collaboration between Linköping University and the Swedish Defense Research Agency (FOI). With APID trademark, CybAero is now established as a global VTOL UAV leader. The Company’s APID product attracts much attention globally for being user-friendly, robust and price-efficient. CybAero’s head office is in the Mjärdevi Science Park in Linköping, Sweden. The company has just over 40 employees and is listed on the NASDAQ OMX First North.

Please press link below for the in-depth clip from Chinese tv channel CCTV7 (featuring the swedish UAV developer and manufacturer CybAero).

Very recently, this clip was also published on youtube (Sep 7, 2014)!

http://www.youtube.com/watch?v=CmqtS7jNF1M&feature=youtu.be

Attached is also the link to CybAero’s video from the September 8 press release, the demo flights  on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The demo flights were performed in July and August in China and presented the aircraft’s ability to inspect power lines and track moving objects.

http://youtu.be/CmqtS7jNF1M

Note: Cybaero Market cap ~500 million SEK

Some investors might argue the Cybareo market cap is high:

The company reported a loss after tax of SEK 10.5 million (SEK 25.4 million, full-year 2013). The loss can be explained by the fact that CybAero continues to be in an intensive development phase to transition the company into an industrial powerhouse with the ability to handle large-scale development and production operations. In addition to one-time costs, recurring personnel costs have increased as a result of new recruitment, mainly in the development, aviation, and production departments. http://www.cybaero.se/en/2-uncategorised/112-semi-annual-report-january-june-2014-cybaero-ab-publ

Cutting Edge Science Invest believes it is low. Why?

This Chinese AVIC order is the first big order and most likely, it´s not the last. In addition, earnings from this order will be obtained over a 7-8 years period (starting 2015).

Examples of commercial, defence and civil authoritie drone applications:

  • Border and coastal monitoring
  • Traffic monitoring
  • Mapping of forest fires
  • Mapping of landfill sites
  • Search and rescue operations
  • Border patrols
  • Mine detection
  • Jamming
  • Reconnaissance
  • Protection of convoys and consignments
  • Perimeter protection for military bases
  • Mapping
  • Power line inspections
  • Monitoring of forest areas
  • Inspection of landfill sites and gravel pits
  • Topographical surveys
  • TV and film recordings
  • Transport

A comment on the transport application: Compare the google Project Wing drone project (link to video clip): http://www.telegraph.co.uk/technology/google/11062925/Google-tests-drone-delivery-service-in-Australian-outback.html)

CybAero is at the leading edge of developments to create an unmanned futurehttp://www.cybaero.se/en/

CybAero develops and manufactures unmanned helicopters known as UAVs (Unmanned Aerial Vehicles) for an international market. The helicopters are adapted to the unique requirements of each individual client, and cost effectively and safely reduce the risks to people in hazardous environments.Over the past decade, UAVs have seen the most dynamic growth of any sector in the aviation industry, and this strong growth is forecast to continue until 2020. Most UAVs are currently fixed-wing UAVs, over which unmanned helicopters have many advantages. For example, they don’t need long runways, which most ships don’t have, and they can capture images better when hovering sice they operate at lower altitudes. The APID 60 is an innovative product developed by CybAero’s world-class aircraft engineers and has been tried and tested by our clients in hostile environments the world over.

Attached is the full version of Cybaeros “all time best” key press release:

Swedish CybAero lands order for unmanned helicopters worth SEK 700-800 million to China

First North-listed CybAero, which develops and sells unmanned helicopters, has received an order guarantee worth SEK 700-800 million through an eight-year framework agreement. The order has been placed by a company in the Chinese AVIC group, one of the world’s largest companies which develops and manufactures aircraft and various types of flying vehicles and has over 400,000 employees. The order is dependent on an export permit being issued by the Swedish Agency for Non-Proliferation and Export Controls (ISP).

The order is linked to a framework agreement, through which AVIC has committed to purchasing at least 20 helicopter systems during the first three years and at least a further 50 systems during the following five years. This gives a total order value of SEK 700-800 million, depending on the final design of the systems. Each system includes helicopters, ground stations and data links. The agreement also covers training and support.

“This represents a breakthrough in the market for the civil application of unmanned helicopters. Our goal is to become the global market leader with at least 30 percent of the global market. Through this order, which is our biggest to date, we’ve taken a significant step towards achieving this goal,” says Mikael Hult, CybAero’s CEO.

To be used by customs, coastguard services and agriculture
CybAero will establish a joint company with AVIC in order to gain access to its volumes and production expertise. In the long-term, the company may carry out some production locally in China for the Asiatic market. CybAero expects to achieve economies of scale through the joint company, which among other things will result in the further streamlining of operations and the potential to operate closer to the local Asiatic market.

Through the joint company, AVIC will entirely target the civil and commercial markets, e.g. customs and coastguard services, the energy sector, agriculture, mapping and rescue services, etc.

“The order is the largest ever anywhere in the world in the product segment within which CybAero operates, i.e. vertical take-off and landing unmanned aerial vehicles weighing less than 200kg. This order will be worth nearly SEK 100 million a year if we can turn out the orders over the eight years covered by the agreement. This will provide a stable basis for our entire business for many years to come,”

Cutting Edge Science Invest (C.E.S.I.):  Not surprisingly, the share price exploded instantly after this press release (~51%, 31 to 47 SEK), quickly followed by a sharp decline (38 SEK). Since, the share price has dropped approximately 1.5 SEK per month in a very calm and steady weak negative trend. Today and prior to today´s closing call forechock, the share price was fluctuating between 32 SEK and 34 SEK,. Will there be another forechock tomorrow? I do not know. What I do know is that most likely, the press release announcing a granted export permit will cause an Earth quake. I predict a net 75 % increase of the share value within a few minutes.

C.E.S.I. is confident that the permit will be granted. Why? C.E.S.I. strongly believe this CEO´s statement:

“A condition of the order for AVIC is the granting of a permit by the Swedish Agency for Non-Proliferation and Export Controls, but we don’t anticipate there being any problem with this at present. We received an order from the Chinese customs authorities in January worth SEK 50 million, and we have been granted an export permit for this order, which is more complex and technologically advanced. The equipment for which we have now received an order is part of our standard system,” says CEO Mikael Hult.

“The agreement and order will not give rise to any further financing requirements for CybAero. Payments will be made by AVIC on an ongoing basis as deliveries take place.” CEO Mikael Hult

During summer, the company has upgraded the engine of its Apid 60 aircraft

http://www.cybaero.se/en/2-uncategorised/106-cybaero-announces-new-engine-supplier

The high quality provided by CybAero is verified by the recent airbus follow-on order

First North-listed CybAero has received another order for a sub-system from Airbus (formerly known as Cassidian, a subsidiary of EADS/Airbus). The order, worth EUR 150,000, represents a follow-on order to the orders that CybAero received in May and October 2013. The sub-system will be used in Airbus’ flying demonstrator, the TANAN 300 unmanned helicopter.

C.E.S.I. is also found of the demo flights press release:

http://www.cybaero.se/en/2-uncategorised/114-cybaero-has-performed-demo-flights

First North-listed CybAero, which develops and markets unmanned helicopters, has performed demo flights on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The demo flights were performed in July and August in China and presented the aircraft’s ability to inspect power lines and track moving objects.

“This is a milestone for us in the work we’ve put into the AVIC order, and yet another step in our growth and expansion,” says Mikael Hult, CEO of CybAero. The now-complete demo flights were performed at various times in July and August at two different locations outside Beijing. AVIC, one of the largest companies in the world and whose operations include developing and producing aircraft, invited numerous high-ranking individuals from government authorities, as well as from the energy sector and business community. CybAero had a demo team on-site, as well as representatives from its management and board of directors. The demo flights demonstrated features including the ability to inspect power lines and track moving objects. Video info was shown in real time from the aircraft’s camera and the system’s ground station was displayed on large monitors.

“The weather conditions were challenging, with 35-degree Celsius heat and strong winds. But the helicopter functioned just as it was supposed to, so we were able to show that it could fly in tough conditions,” says Mikael Hult. Hult is extremely pleased with these demo flights, which highlighted the aircraft’s functionality and maneuvering capabilities. “Being on-site allowed us to discuss our customer’s requirements in greater detail and AVIC has initiated talks and negotiations with potential customers,” says Mikael Hult.

Major attention from China
In early July, CybAero won a large framework agreement with AVIC, which has committed to purchase at least 20 helicopter systems in the first three years, followed by at least 50 systems in the next five years. This translates to an order value of SEK 700-800 million, depending on the final design of the systems. Work on the order has begun. CybAero received an end user certificate from AVIC on September 5 and has initiated the application process for an export license from ISP (the Swedish Agency for Non-Proliferation and Export Controls). AVIC plans to focus on the civilian and commercial markets, such as agriculture, coast guards, the energy sector, mining industry, forest products industry and fire & rescue services. News of the order made a huge splash both in Sweden and abroad, with national Chinese TV channel CCTV7 doing a 3-minute feature on CybAeros product APID 60 in late July (C.E.S.I. : see links above)

In the fall, CybAero will continue performing demo flights around the world. “Intensifying our on-location demo flights for our customers and showing them how our systems function in the environments in which they will later be operating is a crucial step for us,” says Mikael Hult.

In a very near future, Cutting Edge Science invest believes CybAero and Mikael Hult will exceed current market expectations.

More info (general):

http://blogs.imediaconnection.com/blog/2014/08/30/up-up-and-away-commercial-drone-market-ready-for-take-off/

http://www.greentechmedia.com/articles/read/flying-robots-for-the-smart-grid

http://marketingland.com/amazon-drone-delivery-ready-for-takeoff-but-are-we-ready-66869

http://voiceofsandiego.org/2014/05/06/the-drone-industrys-ready-to-take-off-required-reading/

 Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a CybAero share holder. The author does not intend to sell any shares within a near future (= weeks)

Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices. 

 

 

 

Comments
  1. Charly says:

    Thanx for an interesting page, Nexam e.g. looks really interesting!

    About Cybaero, you sold CYB when the ISP-rejection came. On the contrary, I think now is the time to buy CYB. Whean reading beetween lines in the PR and CEO’s comments, it appears as if there was only a controversy concerning the fact that ISP grant only export licenses for two years ahead, whereas CYB’s big chinese order extended over eight years. I.e. no rejection on substantive grounds, rather on formal grounds what the application should adress. Once ISP grants the amended application, there will be a great leap for the share’s value. That’s what I gamble on….

  2. Dear Charly, this is not totally correct:
    In fact, thanks to Nexam (I had to sell stuff to lower the Nexam GAV in the recent dip), I was lucky to sell approximately 96% of the CyAbero shares just before the ISP Rejection. Just sheer luck. A few days later, after the rejection, I sold the last 4 % residue.

    However, I still believe in CybAero and I also believe they will get the export grant. But. I do believe I will have the opportunity to re-enter CybAero in approximately 10 days (prior to the expected positive export grant). I strongly believe this shit-byraeucracy will take even longer (again….), compared to what the market seems to predict.

    With today´s knowledge in mind, I believe the share will drop during a short period of time. However, I totally agree with your comments: We will see a new all time high soon. The question i try to answer in an extremely speculative approach is: EXACTLY when? – Well, not within another 10 days.

    My current focus is on Nexam, Arc Aroma Pure, Opcon and Interfox Resources. I do understand that i have positioned myself at the epicenter of the greatest 2014 C.E.S.I. self-defined risks: To TOTALLY miss the CybAero drones departure. You should not be surprised if I very soon start to by CybAero again 😉 In fact, your written feedback makes me directly nervous. Am I following an intelligent strategy? I have followed CyBaero since late spring…

    Good luck Charly! I AM CONVINCED THAT YOU ARE PURSUING A VERY INTELLIGENT STRATEGY!!!!

  3. Charly says:

    Congrats to your sale before ISP-refusal! 😉 Let’s see if we’re right and how long the ISP-grant takes (don’t wait too long with re-buy)!
    And thanks for your tips Nexam and Opcon – will buy in near future on dips! Sintercast I have since long… 🙂

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