Thanks for very good and detailed write up on Shivalik. Few more additional points/risks/unanswered questions on Shivalik
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Competitive landscape: As of now in ultra low ohmic shunt resistors there are only 2-3 players according to Vishay’s product wise competitive landscape sheet (relevant products highlighted in yellow) Vishay_Compettion_Various_Resistors.xls (290.5 KB). Thus, it seems a limited competition market. However, based on the discussions with some industry guys, they say technologically, there are no entry barriers as such. Hence, it is difficult to figure out, what ensures entry of new players in this segment and what are the entry barriers.
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A significant portion of shunt resistor income comes from Vishay and hence in one of the most promising segment, there remains client concentration risk especially when shunt resistor is likely to be the growth driver for the company
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We still do not have idea about the overall size of the opportunity. Based on my understanding, shunt resistors of various kind have realization ranging from USD 0.01/piece to USD 1/piece. Probably, given relatively sophisticated nature of the shunt resistor manufactured by Shivalik, it is likely to be in the upper two quartiles. However, even if we take leap of faith assumptions on that, the market size world over may be anywhere from USD 500-750 million dollars if/when all cars turn electric or use low ohmic shunt resistor. There are already at least two very large players with advanced technological capacity (Vishay and Isabellenhütte) catering to large OEM players. Given that Shivalik is a very small player with limited capacity and reach, it may be prudent to assume that for some time at least, they will cater to the demand of larger players and not directly supply to OEMs
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Risk of alternate product: IMHO, this remains one of the major medium term risk as the technological landscape around electronic product basket has been quite dynamic and as Ankit mentioned, it is very much possible that the technology becomes obsolete over next 5-7 years, as competing technologies mature and cost curve tapers down. Shivalik has experienced this first hand as their CRT business was completely wiped out few years ago and it took them more than 5 years to compensate for lost revenue on CRT side. Similar scenario is quite plausible in shunt resistor too
Some more research material I found helpful in understanding product/industry dynamics:RUB researchers create early warning sy…pdf (207.8 KB)
Power Metal Strip Battery Shunt Resistor_Vishay.pdf (588.6 KB)
roland_berger_tab_powering_ahead_20150730.pdf (545.7 KB)
Automotive Current Sensing.pdf (235.6 KB)
IHH_Bauelementebroschuere_engl_02.pdf (1.4 MB)
Vishay Resistors Automotive.pdf (2.4 MB)
Disclosure: I have a small position at average price of 60. This is not an investment advise or recommendation, Please do your own research/due diligence before making investment decision