Barron’s – February 25, 2016
It’s been almost a year and a half since I first sat down with Dr. Davor Sutija, CEO of Oslo, Norway-based Thin Film Electronics (THINOL), which makes printed electronic circuits with an amazing variety of uses. I caught up with him briefly at the Mobile World Congress in Barcelona to learn the latest.
Although the stock was down 55% last year, the news flow has been rather good. The company this month received a $42 million investment from Woodford Investment Management.
And since I first met with Sutija, the company has gotten some coverage on Wall Street, including Cowen & Co.’s Robert Stone, who initiated with an Outperform rating last summer.
The four analysts listed by Factset collectively project the company having made 35.5 million Norwegian Krona in the year ended in December, or $4 million, and expect that to soar this year to $14 million or so. That is perhaps indicative of the fact Thin Film has become a “product company” after being mostly an R&D company.
Among the indicators of that move to product is the company getting an 11-million-unit order last year from technology firm Nedap N. V. of the Netherlands for tags that will be stitched into apparel from one of the largest “fast fashion” lines in the world, though Sutija could not disclose the name.
On this particular day, Sutija was talking up the use of NFC on smartphones. With the NFC radios embedded in Thin Films’s printed tags, a fancy-looking label can be applied to, say, a bottle of Johny Walker Blue. By waving an NFC-enabled smartphone in front of the label on the bottle, a consumer can gain various sorts of information about the liquor. The idea is both to start a conversation with shoppers in the liquor store and to continue that conversation after the bottle’s gone home.
This project, done through global liquor giant Diageo, and another one with Spanish vintner Barbadillo, are still pilot projects. But Sutija hopes things are now coming to a head, given that a larger and larger percentage of phones in the wild have NFC capabilities. “I think we’ve reached a breakout stage now with NFC,” he says. Most phones these days running Alphabet‘s (GOOGL) Android operating system come with NFC. Apple‘s (AAPL) iPhone has NFC, although the company hasn’t yet opened up the capability to third-party developers.
On the production side, Thin Films will be helped by the move to roll-to-roll production of its printed labels in 2018, which is more efficient than today’s sheet-fed process. At that point, the company’s production can move from products numbering in the millions of units to those in the tens of millions.
Thin Films shares today rose 14 cents to $3.56.
Read the full article by Tiernan Ray blogs.barron’s .com