AlphaValue Corporate Services Fundamental Analysis FR
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Blackstone Resources

CR
Bloomberg   BLS SW
Batteries-Battery Sys  /  Switzerland  Web Site   |   Investors Relation
Banking on big-bang battery technology initiatives
Latest25/08/2020

Important battery R&D progress

Blackstone Resources reported some milestones in its high-potential battery division. These were promising developments – especially given the global economy’s unwavered focus on a clean environment. While competition in the battery space is intensifying and material operating cash flows at Blackstone are yet to materialise, the group has so far done well – especially from a financing perspective, and the recent progress should help ease realisation of all-important government aid/grants.


Fact

In early August 2020, Blackstone Resources announced some battery R&D milestones at its German subsidiary, i.e. Blackstone Resources GmbH. As a result, the group’s share price skyrocketed >700% in the subsequent trading sessions, although it retreated significantly in the following weeks.


Analysis

According to management, the following were achieved in July 2020:

1/ the world’s first battery cells with thick printed electrodes were successfully manufactured and tested; these printed batteries are claimed to have higher energy density (>20%) vs. traditional lithium-ion batteries;

2/ manufacturing was undertaken using environment friendly electrodes vs. chemical electrodes – which have risk of high inflammation – used in lithium-ion batteries; and

3/ now large-scale assembly line plans under implementation to produce the above-discussed batteries / cells at high speed.

Interestingly, apart from the above achievements, the group is simultaneously also testing the printing of solid-state battery cells. As a reminder, the group’s R&D initiatives are being undertaken by Fraunhofer IFAM, i.e. the German research pioneer.

These are promising and timely developments, especially as the pandemic-struck world economy’s focus on a cleaner environment remains largely unchanged. Moreover, such developments help reinforce chances of Blackstone successfully securing government financial aid for further strengthening its research initiatives.

Although, on the competitive side, the developments are equally fast-paced. With a growing demand for longer-lasting EV batteries, and many industry pioneers claiming (near) success in launching “million mile” batteries, the activity in this space is set to intensify further in the coming months/quarters.


Impact

As the recent battery developments bode well for the group’s ‘longer-term’ prospects, our NAV and DCF estimates reset materially higher – up 31% and 57%, respectively. Our target price has increased significantly, and the recommendation has changed to a ‘BUY’. As most divisions are yet to initiate operations and/or attain meaningful scale, the NAV – with >290% upside – is a better measure to gauge the group’s long-term potential (assuming most business plans materialise as targeted by management).


Target
Upside 339%
Price (CHF) 2.66
Market Cap (CHFM) 114
Perf. 1W: 11.8%
Perf. 1M: -6.34%
Perf. 3M: -25.3%
Perf Ytd: 23.1%
10 day relative perf. to stoxx600: 0.56%
20 day relative perf. to stoxx600: -9.00%
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