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I don't understand. These are alerts for filings back in 2011. Mahamedi was granted stock options with this filing in 2011. Those options expired in 2015. What is the relevance to today?
If you are referring to the SEC form 3 filing for the University of North Carolina Chapel Hill Foundation, the symbol on that filing is for LQDA, not LQMT. Liquidia.
Ah. Thank you.
Have either of these links been posted before? The "mirror finish" video that matches one of these pictures was posted by joshuaeyu, but I don't remember having seen either this page or the market analysis linked.
http://www.casetekholdings.com/html/product_design.php
This is from November of 2017. They talk about new factories in Jiashan and Yancheng that require 18 billion yuan for new equipment for a US based smartphone maker's new product. Is "NB" referring to Apple?
https://jsmarket.jihsun.com.tw/ECADMIN_Market/Bonus/NBbonus/images/GoodsImages/ResearchFile/20171114092032709.pdf
The field has advantages. In order to further promote the development of Eontec new energy automobile industry and expand the market share of new energy automobile products, on August 13, 2018, Eontec and China's automobile industry signed the "Strategic Cooperation Framework Agreement" (hereinafter referred to as " This discussion")
I suppose toxicity doesn’t matter so much on a missle.
Vit1...Military Applications.
I wish I had your confidence. You are confidently and publicly willing to make a major investment decision (ride it out for another year or sell) based upon a chart published by inverse.com and a non-answer to an investor question on Eon’s website. I personally would be afraid to ignore the complexities involved with our CEO who is the majority shareholder in a company who has recently assembled a web of investors, suppliers, researchers and factories meant to potentially supply the world’s largest company via the world’s largest contract manufacturer, via the some of the world’s other largest CMs, using an almost incomprehensible web of patents and intellectual property co-owed and licensed through multiple companies with varying rights to alloys with different price points, suppliers and nuanced structural properties, in a global environment, with a trade war pending, intense devaluation of the yuan relative to the USD, industry 4.0 goals, including 5g certification by the Chinese government, the movement of Huawei into the #2 spot worldwide, long-term Apple strategy, glass sandwich vs. metal back vs ceramic, production capacity estimates, mirror finishes, power upgrades and Hauck’s dog shows.
My fear is that I will latch on to a simple solution to a complex argument so that I can resolve my fear of losing vs. fear of losing out conflict for another day.
These two links add two pieces of information to the thousands already there. I’m not sure that they alone seal the deal for me the way they do for you.
As for the BMG cost argument... Stainless is twice as expensive as aluminum and Apple uses it extensively. BMG is at least cheaper in Apple’s context than stainless. Where I think this matters is that the cost of manufacturing will fall as Apple’s CM’s perfect the process. If capacity is a limiting factor, then Apple is forced to use BMG in only one phone this year vs. all three. If the phone they mean to use it in is the cheapest phone, and they cannot produce for near the cost of aluminum, and aluminum is a viable replacement, then we have a problem for 2018 as you say. The counterpoint to that argument is that Apple needs a “5g” capable phone ready and certified for the Chinese market. $1000 phones won’t sell to the masses in China. Aluminum and stainless don’t pass the “5g” test. Therefore, the cheapest Apple phone needs to have a liquidmetal mid frame or a way around the “5g” issue. Samsung is ready. Maybe Apple has done something similar.
Maybe. I don't know that BMG is 30x the cost of aluminum, I was just using what was presented. I assume that BMG has a higher density than aluminum, so half the thickness doesn't necessarily correlate to half the weight.
Either way, raw material price comparisons ignore the other 98% of the phone cost; RF transparency, water/dust, bending, necessity to include other materials (glass sandwich), post-production finishing, tool life, new machine costs, scrap rates, scarcity/abundance of CM expertise, tariffs, disparate material bonding/welding, licensing, throughput, etc.
Apple is criticized for not introducing any revolutionary products as of late. They have perfected the existing supply chain. They are incrementally improving what can be done with existing materials. Any revolutionary change is going to require their materials and assembly to be lighter, and stronger, with more complex shapes, tighter tolerances, and fewer production steps. Every additional step introduces a chance for error, additional time, additional cost, more time for testing prototypes, more time for reconfiguration for each new change, less ability to automate. The move to BMG is necessary. At some point, they will need to stop refining their aluminum and stainless production capabilities, and begin the refinement process anew with a more advanced material.
The raw material cost will not be the deciding factor.
Raw 7000 series Aluminum is roughly $.0018 per gram)
The iPhone 6 Plus uses 35g of aluminum
Aluminum cost per phone = 6.3 cents
Aluminum midframe is reported to cost Apple $10-$15;
The cost of the raw material is relatively insignificant. Process steps require machines, people, tools and time make up the bulk of that $10 - $15.
If BMG costs $.054 per gram (30x) and therefore costs roughly $2.00 per phone, Li needs to get his cost to manufacture $8 - $13 to match Aluminum and $18 - $23 to match stainless.
Neither aluminum nor stainless pass the "5g" test. Aluminum bends easily. Even if the initial cost is over that of aluminum, it has the advantage of allowing wireless charging, being stronger, thinner, and cheaper than stainless. After a year or two of refinement, it will undoubtedly be cheaper than aluminum in practice if it isn't already.
I suppose this could simply be one of many deliveries of alloy to come. For all we know, it could be 4000 lbs per month.
The Cloud Metal JV will eventually affect LQMT via automotive (GM).
The iPhone production, if it happens this year, will be via a large, known company already in Apple’s supply chain using Li’s formula and machinery.
Bond is implying that a well-known JV, built for magnesium and aluminum in the EV auto market, was built to manufacture iPhone mid-frames.
He found a few, well-known facts, and is filling the gaps with tales of mystery and intrigue.
What I would love to know is how many of Eontec’s 500c machines have been sold in the past 18 months, and to which large manufacturers? Has the capacity issue, and the redundancy issue been resolved to the point where one of three iPhones is ready for this fall?
Bond seems to write a lot without actually saying anything.
He introduces his “syndicate” with 75000 sq meters of manufacturing space for aluminum and magnesium die casting. I’m not sure if we are supposed to extrapolate that this space would be used or shared with future BMG production. It’s a long way to go to tell us that Li has a joint venture to serve the need for lightweight materials for the auto industry. The JV has lots of investors.
Then he talks about the lack of GaN-on-SIC foundries as a source of demand. Demand for Zirconium based liquid metal? Huh?
Then he talks about Apple needing LQMT.
Do I believe that Apple needs Li? Sure I do. I also believe he is building out the infrastructure of suppliers. 2020 is a big year, etc... But a secret cabal of investors building something 1/7 the size of the Tesla gigafactory meant for aluminum and magnesium die-casting to be used for apple midframes. Apple was forced due to the lack of gallium nitride in silicon carbide foundries and an OLED shortage. Really?
I’m not saying he doesn’t have some random facts scattered in there. I just think it is a highly misleading piece with those facts either poorly tied together or intentionally stitched to show something he can’t prove with actual facts. So 38.5% without citing the agreement in which that is stated?
Better pay Jason Bond for his FBI like sleuthing abilities in the deep obscure corners of Chinese financial and corporate reporting. Caveat Emptor indeed.
Huge pressure on the yuan lately indicating liquidity problems in China. See August 2015. If we have Chinese investors, they might need money. The quickest way to get that money is to liquidate American securities.
Hauck could also be cashing out involuntarily.
What I don’t think it is is some insider knowledge that the ship is sinking. The volume would be higher.
That would show some real hustle. It's like driving for Uber after work with the company car to make some walking around money. Scrappy.
Speaking for myself and I assume others on the board, the constant “reminder” that stock is a dead end from those who have invested the longest but refuse to actually sell is getting old.
Meridian Magnesium fire...
http://www.wlns.com/news/meridian-magnesium-explosion-sparks-nationwide-impact/1172110003
Opportunity here?
Nice. I see a few pieces of fruit on that table, along with a finished product so that viewers can draw their own conclusions.
Well, interesting in the sense that it validates my long held assumption that you just stated. Others have stated that Eon would never “give” Tesla to LQMT. This shows that Tesla USA is our customer, and Eontec is the manufacturer as suspected.
THat is what I hope to see on May 8. I don’t expect any massive revenues, or Apple explosion this quarter. But if LQMT is receiving revenue from Tesla we will see it. Some questions I have:
1. Will we have high (relatively) revenue with high costs reflecting a sale through LQMT but produced by Eontec, or lower revenue and low cost reflecting a royalty? I prefer the former.
2. Did we make parts for the Model 3? If we did, and Tesla doesn’t go bankrupt, we can begin to correlate Q1 Model 3 production to our revenue and extrapolate using Tesla’s predictions.
3. Did we only solve a corrosion issue for Tesla?
We had less than $200k in revenue last quarter. Tesla produced fewer than 2000 Model 3s in the last 6 months of last year. Even if we did get paid for them, the amount would be lost. This quarter was closer to 10,000 Model 3s.
In my opinion, the numbers will affirm or refute the financial mechanics between the LQMT East/West dynamic. What I hope for is that they show Kanadien’s theory to be true, without being too big. I want another quarter of cheap prices to buy, knowing that the revenue will be ramping up.
That’s very interesting. Co-developing alloys and machines truly begins blending the companies into one functioning entity with east and west locations. The manufacturing location and the company name on the purchase order become the only difference in buying from LQMT and Eontec In the case of Tesla, this gives them the same product, made from the same alloy, on the same machine, made locally.
Interesting that Eontec is not listed as a Tesla supplier.
SAGA plastics also listed as a licensee.
And it is “crushed”. What is the application for crushed alloy vs. ingots? Do our machines accept this form of feed stock? Or is this form primarily used for coatings and powder injection molding?
That depends heavily on the P/E ratio, which depends heavily on the anticipated growth, and breadth and depth of the hype.
For $5 you need $250 million in earnings at a p/e of 20. $50 million in earnings needed at a p/e of 100. Market cap at $5 billion.
ConMed has a market cap of $1.7 billion. They are being talked about as a big customer.
The slow speed at which medical adopts due to FDA approval won’t get us enough clients soon to get us over $5.
I can see Tesla getting us over the $15 million in revenue mark if they don’t fold. Earnings though? Doubt it.
GM, Volkswagen, BMW, Ford? Eventually, they will be huge. This year? Maybe something, but not $100 million in earnings.
$5 a share without Apple? It would take another volume CE player(s) who was/were willing to promote the material, thereby providing capital, thereby lowering to cost of manufacturing. Without CE? $1 - $2 that might be hard to sustain.
Escape velocity takes a big rocket.
It isn't a strong opinion. I don't know. I don't Believe. I'm using logic. It is bound to be wrong. The higher up the decision chain I am wrong, the more wrong my story.
1. Apple likes Liquidmetal the alloy and actively researches its use
2. Liquidmetal has an relationship with Apple
3. Li has stated that a major reason for investing in LQMT is #2
4. Industry 4.0 is a real thing
5. 5g is a real thing
6. Wireless charging is a real thing
7. The RF transparency of LM and Gorilla Glass is real
8. The cost savings of 1 step solution is real
9. The trend toward automation is real
10. The need to diversify a supply chain is real
11. Shipping takes time and costs money
Question #1: Is Apple going to continue using stainless or aluminum forever? Why not?
Question #2: Is Apple going to always manufacture in China given that automation makes it cheaper near the location?
Question #3: Who has the capacity to make 200 million cell phones annually if Apple chooses to use BMG?
Question #4: If not Eontec, who? With whose machines and whose formula?
You can't see what is going to happen, if you simply look for reasons to disprove everything that benefits you. What is logical, and who has the leverage?
To not use BMG, Apple needs to find another material, or stay with stainless steel and aluminum forever. Not likely. Conclusion: They will likely use BMG.
LM105 is too expensive and too restrictive today. Eontec's is cost competitive. Assuming they use BMG, to not use Eontec's formula needs to improve LM105 and the machines before its competitors do. Not likely. Conclusion: They will use Li's formula and machines.
For all of the above to be true, Li has to say "yes". Li is the majority shareholder in LQMT. LQMT cannot enter CE. For Li to have paid $64 million to enter LQMT, he must have had a reason that has an ROI greater than $64 million. You could argue he wanted to steal our patents for non-CE related manufacturing, in the hopes that making tiny, expensive parts will pay him back quickly. You could argue that he expanded capacity in California so that he could make tiny, expensive parts in a very expensive place with really expensive labor as a method to recoup his money. Not likely. Conclusion: He wanted a relationship with Apple, and an American base of operations.
Am I right? Who the f&%^ knows. However, I flatly reject the following:
1. We will never see revenue from Apple, Tesla, etc. because we have never had revenue from Apple or Tesla.
2. We will never see revenue from such companies because we can't imagine ourselves getting rich.
3. Medical is the only reliable source of revenue, and Apple should be dismissed. Apple, the most secretive company in the world, would have made surely made an exception to its gag order for the 271 shareholders of LQMT, so that we could sleep well at night.
4. Tony and Paul cashed in options 9 month ago, so all logic is null and void.
5. My timeframe for getting rich doesn't match up with Li or Apple's plans for world domination. Therefore, it can't be true.
I'm not fooling myself. Even if I am correct, the world is messy. But if I can't at least write a plausible scenario using this sort of logic, I am out. Why would I invest here if I couldn't?
Li had, in 2014, a decent sized aluminum and magnesium manufacturing company with an expensive BMG R&D department that produced some BMG revenue. While he needs CE to popularize and commoditize his life's work, I can see why he wouldn't sell his soul to Apple. I can also see why Apple would only be interested in Eontec's patents. Maybe they offered an LQMT-like offer to Li once-upon-a-time. He wouldn't have been desperate enough to take it.
I'll take the thanks, as those aren't easy to get on the interwebs. However, I have not done one piece of significant DD on my own. It has either been given to me by someone on this board, or a post has prompted me to look for the obvious. My contribution to date is mostly educated consolidation of DD into a narrative, and a little self-righteous scolding of others when I let my guard down.
The willingness to maintain or expand the cross-licensing agreement is a big part of that. The implicit trade value in that agreement is that they get access to our non-CE patents and our relationship with Apple, and we get access to their manufacturing capacity, part-size capability and cheaper formulation.
If that win-win balance changed slightly in LQMT's favor for a time (a big US contract that could have been Eontec's for example) Li could ignore it for the good of the long-term, global strategy. "Left pocket or right pocket..." as Josh would say. Now, the government controller could decide that Li is out to enrich himself via LQMT at the expense of China, and restrict the agreement with LQMT.
This hasn't happened yet, but it COULD happen. The fact that it could happen, means that Apple might get cold feet. I doubt it. As long as Apple is centralizing the production of the iPhone in China, they will run into this issue. Instead, they will look for leverage.
1. Apple wants to distribute production regionally.
2. Apple needs BMG
3. Apple invests in LQMT formula
4. Apple can't get price low enough due to material cost, throughput and high-gloss, one step issues.
5. Li has BMG but needs big time funding and strategic partners to expand to Apple-sized production levels.
6. Apple wants Eontec's BMG and potential capacity, but wants exclusivity.
7. Apple convinces Li to buy into LQMT with promises of treasure and fame.
8. Li borrows and joint ventures to build capacity from NPO and state involvement. You are here.
Apple still has the leverage. Apple manufacturing with Eontec benefits China. If Apple wants to manufacture in the US in the future, it needs/wants Li to have LQMT. Therefore, China wants the LQMT relationship.
China also realizes that moves to help its local phone manufacturers need to emphasize the sale of those phones, but not the manufacture of those phones. Apple is going to sell phones worldwide. It would be silly to push Apple to the point where they manufacture elsewhere in the short term. On the sales side, they can subsidize the locals to allow a more competitive market.
Back to the timeline...
9. Apple begins building out its regional manufacturing capacity. As it gets closer, it loses leverage in China. If Apple loses leverage, LQMT loses leverage.
10. LQMT formulations will/need to be competitively priced for mass production at this point. This removes cross-licensing leverage by the Chinese state, (as we can always switch up formulas) and keeps state involvement to a minimum. China realizes that the formulas are becoming interchangeable.
11. China's 1.3 billion consumers of BMG products become their real power. They now need the model that we all want today...revenue goes to the region where the final product is sold, rather than where it is made.
12. The current 271 LQMT shareholders are featured in a Forbes biopic on the "visionaries who saw the future". Interviews will include with Watts as a "man who saw the writing on the wall and wouldn't quit" and with Gorgol showing his stable of supercars as he shills his latest NY Times bestseller. Eagle will reveal that he "knew the plan all along", and Kanadien will single-handedly be responsible for a boom tax revenues in Canada that exceeds the one attributed to the tar sands.
I need to get to work.
It was Joshuaeyu who was astute enough to even know to look. He is probably a better target for that question.
Removing 105s from the injection molding/cold crucible side and leaving LM-105 could mean LM is superior and price competitive now. It could mean that we have abandoned Materion, and Eontec is producing our formula for us. I don’t know.
Abandoning 105s on the diecasting/ hot crucible side and leaving DC-106 as the sole choice is more confusing to me. I was under the assumption that these materials had different properties that made them suitable in different applications. Maybe changes to the machines allow for more control. Someone smarter than me needs to chime in. Metallurgy and manufacturing is not my world.
If you are Apple, and you need Eontec’s capabilities in order to use LM, which you need for 5g, this would make you nervous. Yet Chinese government/ Communist party intervention is likely inevitable across their supply chain as it relates to China.
If Apple saw this coming, what would it do?
1. Announce massive investment in USA manufacturing.
2. Push FoxConn to do the same
3. Build capacity in other low cost countries near demand (India)
4. Create an Eontec West (LQMT) that was out of direct reach of Chinese government meddling
The best time to replicate operations is when you are making a fundamental change to the product or manufacturing process that offsets the need for cheap labor. When building your new capacity, the process needs to be able to be mostly automated, and near a major target market.
A move for redundancy in manufacturing like that would take years and a lot of secrecy with suppliers.
It wouldn’t surprise me if we are in year 3 or 4 of an 8 to 10 year plan to decentralize and automate Apple’s manufacturing process. Li is furiously trying to build out the initial capacity for Apple, while also building out the magnesium side of the house for auto and medical. The communist party wants its hand in what he is building, because it is deemed important to the future of the Chinese economy, and to Apple’s Chinese competitors. Eon isn’t huge now, but it is poised to be a lynchpin in the supply chains of the next generation of products.
What Apple wants, the auto makers also want. Local, automated, precision. TESLA is retooling parts locally because it takes too long to send them back.
The true value in LQMT is derived by the necessity to switch from the cheap labor, “outsource it to the east” paradigm of the last 20 years, to the “robots and AI next door” paradigm that is coming. A 17 step stainless steel process isn’t conducive to that world. A material that requires one step enables the whole paradigm; especially when many component parts can be made with one step.
We are only at the point where the decision was made to commit to this material. Now the capacity must be built, and the processes perfected. They would be incorporated first into the existing manufacturing process in Asia, while more automated versions were tested in the U.S. Once proven, the manufacturing base is built to scale here. Smaller suppliers get investment dollars from Apple to scale. Bigger ones like Foxconn get long term deals.
Making iPhone mid frames on Eontec machines in a coveted zone in China near Foxconn is where we are, I believe. Manufacturing regionally is where we are headed in the next 5 years. Li is lining up his shots.
I don’t pretend to understand the entire iPhone supply chain or the complexity Foxconn endures when assembling them.
Interesting read on Chinese government intervention in companies like Eontec.
https://www.ft.com/content/29ee1750-a42a-11e7-9e4f-7f5e6a7c98a2
I do. The document from which the Table 1 comes describes the process and differences quite well. I’m just answering Josh’s question.
It isn’t the semantic change that is intriguing. It is the consolidation of options to LM-105 and DC-106. Eontec’s 105s version is no longer listed.
in 4.2 v.6 Table 1 was divided into Injection Molding and Die Casting. DC-105s was still in this design guide under die casting.
in 4.4 v5, the table is now divided into Hot Crucible and Cold Crucible. Both INJ-105s and DC-105s have disappeared from this version.
105s was removed in this latest version.
At first glance, little has changed. They cleaned up some language, formatting, and resized some pictures. They changed the maximum shot size to 350g from 300g with the maximum part size remaining at 180g. In another graphic, shot size remained at 300g, inconsistent with the other change.
I need to read them for technical details. I’ll share anything I find that is interesting.
Li sold 45 million shares of Eontec for 450 million yuan to ZhuZhou.
In addition to the 45 million shares, Li transferred the voting rights (but not the actual shares) to 35 million shares to ZhuZhou. This gives ZhuZhou majority ownership in Eontec when it comes to voting.
The commentary that I added earlier is that the remaining 81% that ZhuZhou does not own is likely held in part by Li supporters, giving them a voting majority as a block.
4.2 v5
4.2 v6 1100 total changes (31 replacements, 249 insertions, 249 deletions, 571 styling)
4.4 v5 892 total changes (101 replacements, 48 insertions, 82 deletions, 661 styling)
I can look through the diff reports later.
The latest that I see before 4.4 is 4.2 v6 uploaded to the site in November of 2017. 4.2 v5 was uploaded in October.
It looks like Port of LA...
ZIRCON ALLOY MATERIALS 2017-10-08
I see. Thanks for clarifying
So Eon Industry (Li) sold 9.78% of Eontec for 450 million yuan. This brings Eon Industry's (Li's) share of Eontec from 31.51% to 21.73%.
ZhuZhou had previously acquired 18.46% of Eontec in the NPO. This additional 9.78% brings its total to 28.24% of Eontec, making it the largest shareholder.
It sounds like Li has some plans for which he needs some cash.
Thank you. Good background.