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#Thinfilm: To good momentum to ignore

A few weeks ago (February 2nd) we closed our long position in Thinfilm Electronics, with a solid 27% gain in just 4 weeks. The major share price increase took place on the milestone agreement with Xerox, widely considered as the commercial break-through for the company. In hindsight, our decision was proven to be premature as  newsflow has continued to be strong.

We believe that momentum is simply too strong to ignore and re-enter a position at SEK 8,00. Here is what happened since our last update:

  • February 19th: Thinfilm decides to establish a Level 1 ADR (American Depositary Receipt) program in the United States, and that the Company today has filed a registration statement (Form F-6) with the U.S. Securities and Exchange Commission. The Bank of New York Mellon has been appointed as the Company’s depositary bank for this program.
  • February 25th: Thinfilm today announced the launch of OpenSense(TM), a new NFC sensor tag technology with the ability to drive enhanced consumer engagement and improved product security. This innovative technology addresses compelling applications in a range of global markets, including wine and spirits, pharmaceuticals, cosmetics, health and beauty care, and automotive.
  • February 25th: Diageo plc, (NYSE: DEO) a world leader in beverage alcohol, and Thin Film Electronics ASA (“Thinfilm”) (OSE: THIN.OL), a global leader in the development of printed electronics and smart systems, will look to completely change the role of a bottle in the consumer experience, with a prototype JOHNNIE WALKER BLUE LABEL® “smart bottle” that will be unveiled at Mobile World Congress, taking place March 2-5, 2015.
  • February 25th: Reference is made to the announcement on 28 January 2015 regarding Thinfilm applying for transfer to the OSE Main List. The Board of Oslo Børs today approved Thin Film Electronics ASA for listing on Oslo Børs. The first day of trading on the main list will be Friday 27 February. Thinfilm’s CEO, Davor Sutija, will ring the bell at the start of trading on the Oslo Børs at 9 am CET, after which, he will deliver a presentation for financial press, analysts and investors.

We believe the transfer to OSE Main list will have positive consequences, both for the liquidity in the share but also in terms of ownership. Many major investments funds are limited by internal policies to only invest in companies listed on the Main list. Furthermore, the ADR programm should be helpful to increase international awareness and increase valuation multiples as US investors tend to be more generous in valuing fast growing growth companies, compared with Scandinavian investors.

Also, the developments on the product side are quite encouraging. Deals and co-operations with high profile names such as Xerox and now Diageo, hugly help to put Thinfilm on the map.  The connected “smart bottle” aims to enhance the consumer experience by using printed sensor tags featuring Thinfilm’s OpenSenseTM technology, which can detect both the sealed and opened state of each bottle. The tags and the sensor information they contain will allow Diageo to send personalized communications to consumers who read the tags with their smartphones.

The innovation, created by Thinfilm in collaboration with Diageo Technology Ventures, will make it possible to send consumers targeted and timely marketing messages, whether at retail or after purchase, such as promotional offers, cocktail recipes and exclusive content.

Thinfilm’s proprietary and patent-pending OpenSenseTM technology makes use of smartphones’ Near Field Communication (NFC) capabilities. The technology allows Diageo to track bottle movements across the supply chain, in-store and to the point of consumption, with the sensor tags remaining readable even when the factory seal has been broken, providing an additional layer of security in protecting the authenticity of the product.

Unlike conventional static QR codes that are often difficult to read, easy to copy, and do not support sensor integration, OpenSenseTM tags can dynamically detect if a bottle is sealed or open with the simple tap of an NFC smartphone. To ensure authenticity, the tags are also completely and permanently encoded at the point of manufacture and cannot be copied or electrically modified.

Helen Michels, Global Innovation Director, Futures Team at Diageo, said:

Mobile technology is changing the way we live, and as a consumer brands company we want to embrace its power to deliver amazing new consumer experiences in the future.

“We constantly experiment with the latest cutting edge technologies to enrich and enhance the experiences delivered by our iconic brands. Our collaboration with Thinfilm allows us to explore all the amazing new possibilities enabled by smart-bottles for consumers, retailers and our own business, and it sets the bar for technology innovation in the drinks industry.”

Davor Sutija, Thinfilm Chief Executive Officer, said:

As mobility becomes ubiquitous, consumers want and expect brands to follow suit and deliver custom mobile experiences. But today’s conventional NFC mobile marketing solutions are not technologically advanced enough to create immersive or customizable consumer experiences.

By leveraging OpenSense(TM), Thinfilm is enabling the ‘smart bottles’ to carry digital information that can be accessed via NFC smartphones. Diageo can reap the benefits of the intelligence gleaned from our smart sensors and create engaging experiences for its customers. This is how we will begin to build the real Internet of Everything.

The prototype bottle will be on display at Thinfilm’s booth at Mobile World Congress in Barcelona, Spain throughout the four-day event. Furthermore, CEO Sutija will discuss Thinfilm’s OpenSense technology during his keynote address on Thursday, March 5, at Mobile World Congress 2015 in Barcelona, Spain. Thinfilm will also conduct live demonstrations of the OpenSense technology at its exhibition booth located in the Innovation Norway pavilion located in Hall 6, Stand 6H20.

We expect Thinfilm’s participation at the Mobile World Congress to further strengthen momentum around the company.

Nordic Investor

 

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