Food4 thought
Regular
Brainchip’s technology has the potential to be implemented in the field of
Edge AI and recent research/licensing deals they’ve secured indicate the
growing interest in the capabilities and prospects of the Akida platform.
Key Messages
Potential game-changer for Edge AI adoption: Brainchip’s neuromorphic
technology can handle complex computations and enable AI applications but at a
lower power consumption. These are essential for Edge AI, which is the next area
of growth given it could address the constraints of current AI infrastructure. Their
technology had been explored by NASA, US Air force (AFRL), Mercedes Benz and
eventually licensed by companies in semiconductor and space industries. We
believe Brainchip is set to secure more licensing deals with the recent introduction
of Akida 2.0 and TENNs architecture and eventual release of newer products.
Strong management execution and expertise: Despite challenges in
commercialization, funding, and retirement of co-founders, Brainchip furthered the
development of Akida, regained some research/licensing deals, and attracted key
personnel with extensive background in semiconductors, AI, robotics, and
experience with companies such as Qualcomm, HP, IBM, Intel, and ARM Holdings.
Investment Thesis and Valuation
BrainChip Holdings Ltd is an Australia-based
company established in 2004 and developed
the Akida technology, a neuromorphic
computing approach that mimics the way
the human brain works, thereby providing
higher performance and efficiencies. It looks
to apply its technology to the edge AI sector,
which covers multiple industries such as
automotive, industrial, healthcare,
consumer, and space/aerospace.
Key Data
Valuation (A$) 1.00
Current Price (A$) 0.255
Market Cap (A$) 516
30D Ave Turnover (A$m) 2.32
Trim Capital forecasts
23A 24A 25E 26E
Adj NPAT ($m) (29) (24) (30) (32)
EPS adj (c) (0.9) (0.9) (0.8) (0.8)
EPS gwth (%) 32.1 0.0 -14 0.5
Potential acquisition target: Over the years, there has been increasing investments
being made into Edge AI and neuromorphic computing. An established company
(i.e. ARM Holdings, NVIDIA, Intel etc) looking to expand into these fields may acquire
BrainChip, given the capabilities and potential of the Akida IP platform.
Valuation of $1.00: We valued Brainchip through several methodologies using
scenario analysis (+291% upside), M&A comparables (+265% upside) and real
options (+712% upside). At the current share price, BRN is trading at a 16x premium
relative to FY24 NAV and 17x relative to FY24 NTA.
Catalysts and Risks
FY Year End - - - -
- - - -
PE adj (x) - - - -
DPS (c) Div yield (%) - - - -
ROE (%) PB (x) 27.4 25.4 50.0 32.0
12- Month Share Price Performance
More licensing deals amid increasing Edge AI adoption: We expect more licensing
deals to be announced in the next 12 months, amid the recent release of their new
architecture called TENNs and increasing growth of the Edge AI environment.
Risk to investment thesis: The key risks that Brainchip faces are uncertainty on
further licensing deals, realization of royalty revenues, pace of Edge AI adoption,
funding for R&D and commercialization.
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
May-24 Jul-24 Oct-24 Jan-25 Apr-25
Source: LSEG
Glen Wellham, Senior Analyst
glen.wellham@trimcapital.com.au
Mark Tomlins, Senior Analyst
mark.tomlins@trimcapital.com.au
This research report and any access to it, is intended only for wholesale clients within the meaning of the Corporations Act 2001 of Australia.
The company covered in this report is currently or may in the future be a research client of Trim Cap Pty Ltd (AR 1276369, ABN 87643977351) a Corporate Authorised Representative of
Trim Capital Pty Ltd (AFSL 526147, ABN 87643977351).
trimcapital.com.au See important disclosures and disclaimers at the end of this report.
Edge AI and recent research/licensing deals they’ve secured indicate the
growing interest in the capabilities and prospects of the Akida platform.
Key Messages
Potential game-changer for Edge AI adoption: Brainchip’s neuromorphic
technology can handle complex computations and enable AI applications but at a
lower power consumption. These are essential for Edge AI, which is the next area
of growth given it could address the constraints of current AI infrastructure. Their
technology had been explored by NASA, US Air force (AFRL), Mercedes Benz and
eventually licensed by companies in semiconductor and space industries. We
believe Brainchip is set to secure more licensing deals with the recent introduction
of Akida 2.0 and TENNs architecture and eventual release of newer products.
Strong management execution and expertise: Despite challenges in
commercialization, funding, and retirement of co-founders, Brainchip furthered the
development of Akida, regained some research/licensing deals, and attracted key
personnel with extensive background in semiconductors, AI, robotics, and
experience with companies such as Qualcomm, HP, IBM, Intel, and ARM Holdings.
Investment Thesis and Valuation
BrainChip Holdings Ltd is an Australia-based
company established in 2004 and developed
the Akida technology, a neuromorphic
computing approach that mimics the way
the human brain works, thereby providing
higher performance and efficiencies. It looks
to apply its technology to the edge AI sector,
which covers multiple industries such as
automotive, industrial, healthcare,
consumer, and space/aerospace.
Key Data
Valuation (A$) 1.00
Current Price (A$) 0.255
Market Cap (A$) 516
30D Ave Turnover (A$m) 2.32
Trim Capital forecasts
23A 24A 25E 26E
Adj NPAT ($m) (29) (24) (30) (32)
EPS adj (c) (0.9) (0.9) (0.8) (0.8)
EPS gwth (%) 32.1 0.0 -14 0.5
Potential acquisition target: Over the years, there has been increasing investments
being made into Edge AI and neuromorphic computing. An established company
(i.e. ARM Holdings, NVIDIA, Intel etc) looking to expand into these fields may acquire
BrainChip, given the capabilities and potential of the Akida IP platform.
Valuation of $1.00: We valued Brainchip through several methodologies using
scenario analysis (+291% upside), M&A comparables (+265% upside) and real
options (+712% upside). At the current share price, BRN is trading at a 16x premium
relative to FY24 NAV and 17x relative to FY24 NTA.
Catalysts and Risks
FY Year End - - - -
- - - -
PE adj (x) - - - -
DPS (c) Div yield (%) - - - -
ROE (%) PB (x) 27.4 25.4 50.0 32.0
12- Month Share Price Performance
More licensing deals amid increasing Edge AI adoption: We expect more licensing
deals to be announced in the next 12 months, amid the recent release of their new
architecture called TENNs and increasing growth of the Edge AI environment.
Risk to investment thesis: The key risks that Brainchip faces are uncertainty on
further licensing deals, realization of royalty revenues, pace of Edge AI adoption,
funding for R&D and commercialization.
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
May-24 Jul-24 Oct-24 Jan-25 Apr-25
Source: LSEG
Glen Wellham, Senior Analyst
glen.wellham@trimcapital.com.au
Mark Tomlins, Senior Analyst
mark.tomlins@trimcapital.com.au
This research report and any access to it, is intended only for wholesale clients within the meaning of the Corporations Act 2001 of Australia.
The company covered in this report is currently or may in the future be a research client of Trim Cap Pty Ltd (AR 1276369, ABN 87643977351) a Corporate Authorised Representative of
Trim Capital Pty Ltd (AFSL 526147, ABN 87643977351).
trimcapital.com.au See important disclosures and disclaimers at the end of this report.
I am sure that we have surprises coming to us, Hey Mr Hehir $$$
