The Veem Ltd (ASX: VEE) share price is climbing in early-afternoon trade after the company provided a gyro sales update.
At the time of writing, the marine technology company's shares are up 5.8% to $1.08. This puts its shares within a whisker of its all-time high of $1.15 reached earlier this month.
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Sales update
The Veem share price is racing higher as investors appear pleased with the company's presence in the Italian superyacht construction market.
According to its release, Veem advised that it has received orders for its gyro stabilisers from two Italian clients, Rossinavi and Overmarine. This marks the first time the company has added these two prestigious superyacht builders to its books.
Overmarine, a designer and builder of superyachts for more than 30 years, produces luxury and long-range yachts branded Mangusta. The Italian boat maker ordered 2 Veem gyros for its new Mangusta 165.
Rossinavi, on the other hand, an Italian manufacturer of custom steel and aluminium superyachts. The luxury yacht builder is seeking to purchase one Veem gyro for its new superyacht design.
While Veem did not reveal the value of the orders, it stated that its order book stands at $5 million. Around $3.5 million of the gyros is expected to be included in sales during the current half.
Addressable market opportunity
Veem highlighted the "huge" market opportunity for its gyros, referring to a report published by Super Yacht Times. The article noted 710 vessels were in the global superyacht construction order book on 1 January 2021. This represents an addressable market of more than $260 million in sales for Veem gyros.
In addition, the company said that there is a total of 9,233 vessels around the world that are considered superyachts. Over the past year, this number grew by 1.7%. Veem hopes to capture this market through retrofitting its gyros on the existing fleet of superyachts.
What did the managing director say?
Veem managing director Mark Miocevic commented:
We expect orders to continue once customers have experienced the benefits of the significantly greater stabilisation and demand VEEM Gyros as part of their new builds.
Having orders in hand already to deliver $3.5m of sales this half gives us confidence that the trend of significant sales increases year on year will continue.
Mr Miocevic said the superyacht fleet represented a huge market for VEEM Gyros, both in the new constructions underway and the retrofit potential.
Our current sales, while growing rapidly, are only a small portion of the potential within the superyacht, commercial and defence addressable markets.
About the Veem share price
The Veem share price has gained more than 130% in the past 12 months and around 30% year-to-date.
Based on the current share price, Veem commands a market capitalisation of $140.4 million, with 130 million shares on issue.
