“Very Pleasing” as Dr Luhua Li would say. I have been patiently...

“Very Pleasing” as Dr Luhua Li would say.

I have been patiently watching the developments with PPK since my last post sometime ago. There’s not much else to do given the performance of management.

Understandably people want things to move quickly when exciting things are happening. For example, contracts for the sale of BNNT haven’t occurred, but they will come. The annual production in 2018 was only around 36kg probably averaging below 90% purity, so things are coming off a low base. It’s also likely that the larger users have contracts in place for supply but as these unwind there will be only a one stop shop – BNNTL.

That said, BNNT is a remarkable material with incredible properties and its applications will be diverse and broad and probably even only imagined at present.

What BNNTL has done by being able to produce a high purity product with a patented, scalable production process at relatively low temperatures (and therefore lower cost compared to major competitors) will corner the market, and at least for some time could be a monopoly. There have been years of development in the process and it could be some time before any alternative commercial method can compete. What is encouraging is the comment in the tell all article in @auManufacturing made by the GM of BNNTL who said,“We didn’t understand, we couldn’t have understood the problems that we encountered along the way” and “Professor Li has single handedly (sic) identified the solution to problems as they come up – as problems come up he has always been able to see the way forward.” I think BNNTL is in a strong position unless someone else has a Professor Li.

The battery development must be progressing extremely well, otherwise would there be a pre-IPO raising of $20m, talk of a development and testing expansion, and an IPO? The information available suggests that the LI-S Energy battery technology with multi-layered BNNT may be superior to other Li-S batteries (eg Oxis Energy) especially in energy density and cycling stability. The Li-S Energy battery seems to be at a development stage that others are aspiring to get to in the future, noting that developments are always improving.

As others have noted, an imminent announcement is expected on the validation of the “pouch cell” and the way forward to the IPO. Interestingly, the research from EGP Capital seemed to be well-informed, at least much better than myself, and they were suggesting an end of June IPO, hence the need for the CEO appointment (ex-Metal Storm CEO) to get on with the sales pitch. I’m curious to see what the IPO will seek to raise (number of new shares and price) given that the approach seems to be to commercialise the LI-S battery via JVs and licensing agreements, so may not be capital intensive.

I also found the Amaero CEO comment that they were asked by a major aviation player to partner with PPK in the Strategic Alloys JV to be a strong pointer about the prospects of this BNNT application. Look forward to get some outcomes from this and to get some information about just what the actual benefit of BNNT infusion is.

I have noted some reservations with the non-BNNT related Advanced Mobility Analytics Group. I would suggest that this sector might hold some promise going by the recent takeover activity with Redflex Holdings (RDF.ASX). PPK management has gone places…that shows they are leaders we should follow.

Looking forward to what is to come as the future prospects are of a scale that could grow exponentially. Main problem is that BNNT related investments might cause me even more problems in a diversified investment portfolio than they already have.

Always appreciate reading comments that are informative and constructive, especially the way they are delivered by Cu road.