@laoshi I saw this alert and was initially positive and thought veem might be turning the corner, and all of the divisions seem to be going well. They still have the labor problem to contend with and I don't expect this is going to go away anytime soon. My problem with Veem is that it looks good and should be a buy but then I crunch a few numbers and it is always still expensive. Based on the guided profit of $2.9m it is still on a PE ratio of 20, which just seems too high, especially in the current market, for what is essentially an asset maker - as per @JPPicard's recent blogpost classification system, which is worth a read as I found it to be a useful reminder of how to think about the different buisness models.

The exclusivity aggreement seems like a deal that favors the Singaporean shipbuilder more than Veem. My understanding is that Veem is the only major supplier of these products so if the market demand was thier they should have some negotiating power, but it looks like don't currently. This might change if Gyros become an industry standard for larger vessels, but I think this will be a slow process. It looks like this exclusivity aggreement is just for southeast asia though, so maybe they see it as worthwhile to secure the use of their Gyros and this way at least 12 new ships will have their gyros in them and demand side of the market might be stimulated. The positive is that they have now presold 12 gyros and will have a revenue base for the next 3 years, the negative is that this only 4/yr so not really a step change in the rate that they are selling. It is also only for the small to medium sized Gyros which are much cheaper ($0.25-0.75m range) than the gyros for the larger vessels ($1.5-2.5m). It looks like the demand for the larger vessels (superyachts etc) has really dropped off since Covid, as from memory I don't think they have sold a larger unit in the last 18 months.

When they were first launching these Gyros it looked like they were going to be partnering with Damon to include the Gyros in their new builds, but this seems to have stalled or not much progress to announce in terms of sales. They have been talking about the Damon walk to work vessel as a gamechanger for a few years, I thought this had launched previously, so maybe they are doing another vessel? I think it probably is a good addition to new builds, but I am not as convinced that the ship buyers/builders market consider it an essential piece of equipment yet. All of their test vessels are well recieved but they don't seem to translate into sales.

The propulsion expansion sounds very positive, but they did say last year that they had strong demand out to 2024 and they a steady decline so it will be worth keeping on eye on this to ensure the demand for this division continues. I wasn't sure but it looks like some of the cashflow has been used to build and comission the two new propeller machines so maybe profit is artificially low this year.

I like Veem as a company but I think it gets an undeserved premium.