A Heavily Oversubscribed IPO
AMTE Power is floating on Aim on March 12. The company had hoped to raise £7m. But the IPO was nearly seven times oversubscribed and it was forced to accept additional funds due to excessive demand, raising £13m. This means an estimated market cap of over £60m with 65% of existing shareholders locked in. The company has previously attracted significant investment throughout the product development cycle from industry specialists.
AMTE Power has a highly experienced team focused on a large and rapidly growing market. It was co-founded in 2013 by Kevin Brundish together with several former colleagues from QinetiQ with the objective of developing a portfolio of highly differentiated, lithium-ion and lithium-ion derivative battery cells. David Morgan the Non Executive Chair, has extensive boardroom experience, and was an executive director of Johnson Matthey from 1999-2009.
AMTE Power’s cells are designed to meet the needs of specialist customers in the following sectors:
· Oil & Gas
· Energy Storage
Rising Global Demand
Global demand for Lithium Ion cells is forecast to grow at 15% per annum, reaching $110bn by 2030. AMTE developed its cells from extensive IP licensed from QuinetiQ / Faradion (a multi billion pound company) and is understood to have the 2nd largest cell manufacturing facility in the UK. Between 2020 and 2030 Lithium-Ion auto cells are forecast to grow 25% pa for passenger vehicles and 36%pa for high powered off road vehicles.
Ultra High Power Cell
AMTE’s Ultra High Power cell has been developed with specialist automotive manufacturers and the company is currently engaged with 10 high performance automotive companies. Ultra High Power is highly differentiated from other automotive cells , delivering power consistently at a very high rate. It has undergone early independent testing and is expected to be launched in late 2021
AMTE is also active in the Energy Storage System Market. This market is forecast to grow at 21% per annum between 2020 and 2030. The company is currently in discussions with 4 potential customers with a prototype expected in Q3 2021, a conventional cell in Q4 2021 and a first product release in Q3 2022.
AMTE is in discussions with a potential customer in the defence market for its O&G Ultra Prime Cell. A prototype is expected in late 2021 with a projected product release in 2023.
The company’s “Gigafactory” manufacturing plant gives it a significant head start. Its existing factory measuring 43,000 sq ft in Scotland is believed to be the 2nd largest in the UK. It has a framework agreement for access to the UK Battery Industrialisation Centre cell manufacturing facility, which has just come a step closer to opening with first equipment now being operational. AMTE Power is also involved here via Project Quantum with partners looking into improving cell manufacturing processes. In the longer term the company also has three potential manufacturing locations under consideration.
£17.5M In Grants
The company has invoiced £2.5m to commercial partners for product development and has received £17.5m of Direct and Indirect Grants.
The total lithium Ion market is expected to be worth $110bn by 2030, benefitting from the UK’s Green Industrial Revolution AMTE has significant embedded value within its business, built on a strong IP foundation and extensive knowledge and expertise in its sector.
£5.50 Price Target Versus £1.75 Issue Price
It is anticipated that once launched, 18 months out, revenues are expected to grow towards £12m. This makes a Market Cap of £60M look far too cheap. The issue price is £1.75, Analysts currently expect a target price of £5.50 for the year end 2022, making it look cheap in comparison to comparable renewable alternative enrgy companies.
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