We think now is the time for SEE’s market leading, AI/ML powered driver monitoring system (DMS) software. Incoming European regulation mandates DMS fitment in all new cars, which we expect to catalyse step-change growth in near-100%-margin royalty revenue. This should drive SEE to profitability and FCF generation. However, our forecasts may prove conservative if other geographies adopt similar measures or if SEE secures a fleet-wide rollout with a major fleet operator. Neither opportunity is reflected in our forecasts, providing significant upgrade potential. We initiate at BUY with an 8.6p TP (25x CY27 P/E).
