Sivers IMA

Research note


Sivers IMA: CST receives promising deal

Sivers IMA announced that CST Global has received a framework order worth SEK 21.5m. The order concerns semiconductor devices to an American Fortune 100 company. Today’s announcement regards pre-commercial devices, implying that there is potential for additional, and larger, orders from the customer going forward.

In the Q2 report, CEO Storm mentioned that the company had delivered prototypes for datacenter applications to several customers of substantial size. As mentioned in our latest update, we found this to be promising leads given that it could result in huge orders, exemplified by the master purchase agreement worth USD 10m the company signed with a data center customer last year.

Today, Sivers IMA announced that CST Global has received a framework order from a US Fortune 100 company. It thereby regards a customer of significant size. The company mentions that the prototype evaluation has been successful and resulted in an order of pre-commercial semiconductor devices worth SEK 21.5m. Devices to a value of SEK 12.6m will be delivered in Q4, implying that we should see a strong end to 2018 as estimated. It is not explicitly stated in the press release, but we find it likely that it regards components for data center applications. Sivers IMA mentions that the devices will be checked to the final specification before potentially resulting in additional orders if reaching a stage of volume production. It is currently difficult to estimate the potential purchasing structure and order sizes in such a stage, but it is clear that it could result in substantial orders going forward.

The company has previously stated that CST Global can deliver components worth SEK 250 – 300m depending on product mix. Our interpretation is that the company has stepped-up by managing to attract customers of significant sizes. Apart from today’s order, CST Global has delivered prototypes for data center applications to additional customers which also could result in new large deals. We further find it likely that the company will continue to attract new customers with similar characteristics going forward.

All in all, this is obviously very positive news. Today’s order will bolster its short-term sales and, more interestingly, our interpretation is that there is good potential for future larger orders if everything goes as planned. We will, however, not perform any adjustments of our estimates as of now. As previously communicated, we expect the company to ramp-up its sales substantially towards the end of the year and during the coming years following deals like this.


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