Anoto – An Ongoing Historical Milestone Turnaround In The Swedish Micro Cap Stock Market?

Posted: 12 July, 2015 in Published Investment Calls

The author (CESI) coincidentally stumbled across Anoto AB while attending the Gothenburg October 16 2014 Redeye investor forum. The CEO Stein Revelsby presented and CESI concluded that Stein appeared “slighty stressed and slightly troubled”.

http://www.redeye.se/webcast/investor-forum-14-oktober-anoto (video in Swedish)

However, CESI appreciated the CEO Stein Revelsby´s presentation and especially the following comments (depicted and translated by CESI – therefore the accuracy of these statement can not be guaranteed):

“To be a share holder in Anoto has been equivalent to bad business, but we will not give up until we will deliver a success”

”In Los Angeles, we have frequent office visits by Dreamworks, Disney och Adobe and there we have positioned ourself amongst all the big players – this would not be possible working in Lund”

“We are totally dependent of choosing a partner that has a well established market share. In this case, we only need one customer to secure a 10% market share. If we achieve that, business will be fantastic”.

Only a few months later (January 2015), Stein Revelsby presented Anoto at an event hosted by Redeye and Nasdaq. Stein Revelsby appeared much more confident. CESI strongly believed this was no coincidence.

http://www.redeye.se/webcast/event-med-redeye-och-nasdaq-29-januari (video in Swedish)

Another few months later (June 2015), the CEO presented Anoto in yet another event – Now, Stein appeared even more positive compared to previous presentations. Again, CESI strongly believed this was no coincidence.

http://beta.redeye.se/events#/videos/2auu5l76 (video in Swedish)

 

April 2001 – Initial hype, quotes from a Wired interview… 

“This is the most advanced digital input screen ever developed,” he declares. “It has very high resolution, perfect contrast, and costs a fraction of a cent to produce. Any graphical interface can be printed on it, and you get years of full-time education, paid for by the government, to learn how to use it. It will not be beaten in our lifetime.” He puts the paper in my hands. “And I can give it to you, because I have hundreds more,” he offers, gesturing toward a stack of blank paper on his desk. Fåhraeus isn’t handing me a sketch of the input screen. The paper is the screen. That’s what they’re building at Anoto, the company Fåhraeus launched a year and a half ago beside this muddy field near the southwestern tip of Sweden: a network that can transform millions of sheets of paper into a new front end for the Internet. “If his network rolls out as scheduled, within a year you’ll be able to make a check mark beside a magazine ad to receive information about a product, or even to buy it. Visualize ecommerce without the click-and-wait: Browsing through a printed catalog, you’ll purchase items – software, a subwoofer, or a trip to Paris – by ticking them off with a pen. Circling your destination on a city map will display, on your PalmPilot or mobile phone, the quickest route from here to there, movie showtimes, or tonight’s menu at the best bistros in the area. […] “If we succeed,” he adds, “we will have more product coverage than any other company on earth.”

Jan 2000 Market Cap = ~45.393.870 shares x ~102 SEK = 4600 MSEK (!)

Jan 2005 Market Cap = ~128 744 414 shares x ~18 SEK = 2300 MSEK

Oct 2014 Market Cap = Approximately ~200 MSEK (ATL share price ~0.2 SEK) during the 2014 (last substantial?) share rights issue.

July 2015 Market Cap = 1100 MSEK (!)

 

The Anoto organization, collaborations, 2014 result and milestones are pedagogically and (logically) thoroughly explained in the Anoto Annual report 2014:

http://www.anoto.com/media/1877/anoto-ar14-eng-150521-korr10.pdf

Many of the projects are at an early stage, so CESI is of the opinion that the reported ~40 MSEK sales figures and the -6 MSEK (-13 MSEK) in the previous quarterly report(s) obviously is not reflecting the near future sales and result in these projects. A few examples worth highlighting are quoted below:

“Anoto Enterprise Solutions had a good start to the year and the Welsh Ambulance contract generated significant press coverage and new leads in the UK for similar solutions. There are in total 13 ambulance trusts in the UK so this market vertical alone represents a large opportunity.” (source link)

“Our market presence were also expanded in England and Scotland, especially in the healthcare sector where we launched a new initiative “Decision Support Tool” for Community Care Groups. Also Croydon Health Services NHS Trust successfully applied for funding from the Nursing Technology Fund to acquire 400 Anoto DP201 digital pens for use in the Community. Anoto Partner, Magicomm Limited has been selected and awarded a three year agreement to integrate their OpenForms platform with the ePEX community health system from Ascribe that recently joined forces with EMIS. In parallel we experienced a growing demand from the commercial sector where our technology is applied for inspection forms and education purposes.” (source link)

“TECHNOLOGY LICENSING (OEM SALES) Customers within Technology Licensing develop and sell products based on our intellectual property, software, and digital pen products. For many years, Anoto has licensed its technologies to providers of interactive classroom solutions as well as learning aids for children. Productivity tools, such as for note-taking and meeting productivity, are also long-established products in our Technology Licensing segment. Recently, Anoto has established two new application areas through partners: voting solutions and digital design automation. Voting solutions are based on our traditional digital paper technology, while digital design automation solutions help animators and designers unleash the creative power of digital writing with interactive touch displays. Net sales during the quarter were MSEK 10, which is MSEK 4 above the same period last year. (source link)

OEM Displays A major project with one of the world’s largest IT companies is progressing well and product development went in parallel with contract negotiations throughout the first quarter. Operating expenses were higher and gross margin was lower in Q1 compared to the previous quarter due to the extra resources, consultants, materials and testing related to the project that has been needed to meet tight deadlines and the increasing scope of the project. We expect to make the first public announcement about this project later in Q2. (source link)

Large Format Displays Anoto introduced its first large format interactive display prototype, a 65” UHD 4K display with touch and precision pen input at the ISE tradeshow in Amsterdam in February. We are now working with partners to do a commercial launch of a similar product at InfoComm Expo in Orlando FL in June. We expect the market for large displays to grow fast when businesses are starting to convert from projectors to interactive displays in meeting rooms and board rooms. Anoto’s solution will primarily be sold via OEM customers and will be combined with We-Inspire software and features like palettes and digital paper. (source link)

Panasonic  sales has so far been a disappointment but we expect sales to pick up with the release of the upgraded versions Toughpad 4K Standard at a 50% price reduction (2,999 USD) and the more powerful Toughpad 4K Performance in July. Panasonic announced the updates on April 13th . Now featuring a 5th Generation Intel® Core™ i5 vPro™ processor, as well as HDMI 2.0 input to enhance efficiencies in professional video applications– and priced within reach of a greater range of businesses – it is targeting productivity in fields such as video editing, architecture, design, photography and healthcare. (source link)

Education As announced, SOLiDEdu, inc. in Korea, a subsidiary of SOLiD to providing value added dot-pattern based products and services, has entered into a contract with one of the largest publishing houses in Korea to convert its learning material into digital workbooks using Anoto’s digital writing technology. The initial order is for 50,000 digital pens and is via partner Pen Generations, Inc. (www.pengenerations.com) who has specialized in developing products together with leading solution providers to the education industry. The application is an interactive multimedia education solution, connecting digital pen, paper workbooks and tablets, which allows for more efficient learning and better individual progress. Expected deliveries to TStudy China slipped from Q1 into Q2 but the company has an increasing order back log and we are currently in discussions with partner Pen Generations about production planning and delivery schedule for the rest of 2015. Smartmatic Smartmatic purchased 5,000 licenses in Q1. (source link)”

Today, due to a number of very recent key turnaround milestones (see below), the Anoto share price has started to surge (1.32 SEk July 11). To a substantial degree, the share price increase has also been catalyzed by the expected near future announcement of the identity of “one of the world´s largest IT companies”, currently in an ongoing collaboration with Anoto and product launch planned prior to the 2015 Christmas sales:

“Lund, Sweden – 30 June 2015 – Anoto mentioned in its Q1 report that the company expected to make an announcement regarding a project with a large OEM customer in Q2. The project is developing well according to plan and the parties have agreed in principle on most commercial terms. Some legal work is still outstanding before formal approval, signing and disclosure. Anoto expects the outstanding issues to be resolved within the coming few weeks.” (source link)

More importantly, the CESI take home message from Stein Revelsby in one of the previous presentations was: From 2016, the interactive screen business might be equivalent or even more value adding compared to the Anoto pen business (!)

A quote from the 2015 Q1 report:

“Anoto introduced its first large format interactive display prototype, a 65” UHD 4K display with touch and precision pen
input at the ISE tradeshow in February. We are now working with partners to do a commercial launch of a similar product
at InfoComm Expo in June. We expect the market for large displays to grow fast when businesses are starting to convert
from projectors to interactive displays in meeting rooms and board rooms.” (source link)

Furthermore, CESI is convinced that no more substantial share rights issues will be announced. Why? Stein Revelsby claims that Anoto will be profitable during 2016 and that the current year will deliver the long sought break-even Anoto milestone! Due to the ground braking recent Anoto news flow, CESI is fully confident that Anoto will continue to deliver above expectations…

July 10, 2015 We-Inspire wins InfoComm Best of Show Awards (1st of 950 exhibitors).

“We-Inspire technology works with digital pens on the ideation wall and on Optika’s Collaborate display. Of 950 exhibitors at Infocomm15, We-Inspire is proud to announce winning one of Telepresence Options’ InfoComm 2015 Best of Show Awards. The award, Best Visual Collaboration Solution for Creatives, shows how We-Inspire is transforming how people create and collaborate with technology. We-Inspire applications, paired with digital pens, the ideation wall, and the 4k high resolution display, offer endless solutions for creatives and businesses alike. Check out what Telepresence Options said about our exhibit below:

http://we-inspire.com/news/we-inspire-wins-infocomms-best-of-show-award

Anoto extends exclusivity agreement with TStudy China Co Ltd.

“LUND, 9th July , 2015 — Anoto Group AB (publ.) extends exclusivity agreement with partner TStudy China Co Ltd. TStudy China is the leading provider of innovative solutions and online education platforms to the education industry and schools in China. It has designed and developed software and products based on Anoto’s digital writing technology, which can be widely applied in education industry and other industries.

The agreement that was signed today is an extension to agreement that was signed on August 20, 2013. The exclusive distribution agreement is for 5 years subject to TStudy purchase of a minimum of 2 million pens over the exclusivity period. The exclusivity does not include applications within voting, census and people registration nor products sold by Anoto’s large global OEM partners” (source link)

CESI conclusion: Overnight, Anoto has increased sales potential from “tenthousands” of pens to “millions” of pens. Obviously, this should also translate to impressive sales figures and result from 2016…

Order from InformDS Technologies (P) Ltd, India
LUND, 2th July , 2015 — Anoto Group AB is pleased to announce that it has received an order for 10,000 digital pens and the accompanying software from InformDS Technologies (P) Ltd. The total order value is approximately 12 MSEK plus recurring revenues and the order will be delivered in full by December 31st, 2016. The first shipment has already been made.

Based in Bangalore (India), InformDS has been working with the Anoto LivePDF platform for over a year. The LivePDF platform is embedded in InformDS’s “Practice in an App” offering that helps to automate physician practices. Over 25 physicians have successfully used this new application as part of an initial pilot.

The LivePDF service, in combination with InformDS’s application, enables easy and ubiquitous access to patient information for a physician instantly and from any location. InformDS will be rolling-out the service for general use.

“The Anoto technology enables us to capture the necessary information and make it available digitally, without needing to employ staff for data processing and – most significantly – without requiring our physicians to switch away from their preferred method of writing with a pen on paper” observed Varinder Kaur, Director-InformDS

“This is the second large order within healthcare in India this year and a result of a focused business development effort. We see a very large potential to offer user friendly, secure and cost effective digital writing solutions in India and to participate in the digital transformation process within important areas such as healthcare, financial services and education”, says Stein Revelsby, CEO at Anoto Group. (source link)

Anoto & Optika Display Announce Innovative Large-Format Digital Display Collaboration Technology

Lund, Sweden – 17 June 2015 – Anoto Group AB (publ) will unveil new features and showcase a complete digital writing ecosystem at the InfoComm Expo in Orlando, FL from June 17 to 19, 2015. With their digital pen and accessories, you can combine digital writing surfaces like real paper, small and large displays, and interactive walls for any industry or work process. This year, InfoComm 2015 attendees can test out Anoto technology and network with the creators.

Anoto partner, Optika Display, a wholly-owned subsidiary of STRATACACHE, will introduce the Collaborate 65UHD, a professional grade, 65-inch large-format, Ultra-High Definition 4K LCD collaboration device. The platform combines Anoto digital writing capability and edge-to-edge, multi-touch technology. The result is a collaborative, easy-to-use digital workspace.

The Collaborate 65UHD supports multiple operating systems, computing architectures, network environments, protocols, and applications. This adaptability enables Avnet, our distribution partner, and their VAR and Pro A/V communities to easily create and bundle solutions for both new or upgraded customer environments.

“This is the first commercially available large-format display with high-precision digital writing functionality from Anoto. Collaborate 65UHD has endless opportunities to combine with accessories, devices, and features based upon our Universal Digital Writing platform like paper, palettes, action pads, and interactive walls,” says Stein Revelsby, CEO Anoto Group. “Professional users can continue to use their existing applications for product and content development, collaboration and design, and enjoy the precision and freedom of traditional pen and paper.”

According to Bob Caldarella, SVP of Sales for Optika Display, “This was a special opportunity to partner with innovative companies like Avnet, Digital View, AUO, Anoto, and FlatFrog. Our goal was to create a collaboration platform that combined the most advanced touch glass and active stylus technology available with world-class 4K LCD technology. We achieved that goal, creating a highly productive and efficient collaboration experience for customers in any environment.”

(source link)

Pen Generations, Inc. places a new order for digital pens to interactive educational multimedia in Korea

Lund – May 29 th, 2015 – Anoto Group AB (publ), a global leader in digital writing solutions, is pleased to announce that it has received another order for 40,000 digital pens for one of the largest publishing companies in Korea. The net margin on the order is SEK 1.7 million and expected delivery is in second half of 2015.

SOLiDEdu, inc., a subsidiary of SOLiD to provide value added dot-pattern based products and services, has entered into a contract with the customer to convert its learning material into digital workbooks using Anoto’s digital writing technology. The order is via partner Pen Generations, Inc. (www.pengenerations.com) who has specialized in developing products together with leading solution providers to the education industry.

The application is an interactive multimedia education solution, connecting digital pen, paper workbooks and tablets, which allows for more efficient learning and better individual progress.

The last article attached below was previously posted by the author and should primarily be classified as a

Generation One CESI collection of patent hits using the search phrase “Anoto”.

https://cuttingedgescienceinvest.com/2015/07/06/anoto-ab-in-recent-patent-applications-a-cesi-compilation/

The author decided to avoid speculation or to draw any conclusions based on the patent search. However, some of the hits attached herein are interesting.

Today, Anoto is the largest CESI holding due to the recent and brutal share price surge (in total 460 % from the first entry at 0.28 SEK).  Logically, the author has decided to stay long in Anoto for a number of years. Why? CESI strongly believes the current fuzz regarding the awaited near future large OEM announcement simply could be visualized as the first page of a very successful near future Anoto story. Again, in parallel to the aggressively increasing pen business it´s very impressive to hear Stein Revelsby claiming that the Anoto big- and interactive screens will have equivalent or even more impact from 2016 in a number of applications (!).

A  market cap equivalent to the 2001 valuation (4000 MSEK) within only a few years would not at all surprise the author. This would translate to a share price of ~4 SEK. With today´s share price in mind (1.30 SEK, July 12), the initial end year CESI prediction now seems way too humble (1 SEK at end of year and 2 SEK end of 2016). Hopefully, the 4 SEK share price prediction “within only a few years” also is too humble.  Why? The market has identified the new generation top quality Anoto sales- and collaboration announcements which might translate to a very high tolerated predicted P/E consensus. Anoto – An Ongoing Historical Milestone Turnaround In The Swedish Micro Cap Stock Market?

Best regards, CESI

The author, Cutting Edge Science Invest, is currently an Anoto share holder. 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 advice. 

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