Brokerage report from 2012 w/$4.75 target

Not sure if this has been brought up before and I'm sure all the long long term holders probably remember this. Just thought it was interesting for the new guys that may not have seen it and also to show that these $4-$8 target that pintho always says might not be so far fetched (not a dog at pintho we all love you haha)

Note this article is from 2012

Alexium International (ASX: AJX) has come onto the radar of U.S. broker Merriman Capital, which has placed a Buy recommendation and a US$4.75 per ADR price target on the company.

The company has established itself as an “emerging niche leader in the fire retardant chemical development industry”.

According to Merriman Capital, Alexium’s partnership with leading military textile manufacturers should result in accelerated revenue growth in 2013 and potential profitability in the second half of 2014.


Alexium International is pioneering patented eco-friendly and flame-retardant (FR) technologies that enhance the durability of many day-to-day textiles.

The company is leveraging its relationship with the U.S. Department of Defense (DoD) to help implement its technology in a wide array of military textile distributors.

We believe the expanding FR market is continually looking for green solutions, which should help Alexium acquire several high-margin, recurring revenue streams.

Recently, the company struck a multi-million dollar partnership with Duro Textiles, which in itself could lead Alexium to profitability.

Today we're initiating coverage of Alexium shares at Buy. Our $4.75 price target per ADR is based on 6-times multiple of our FY2014 revenue estimate.


Alexium is a pioneer in FR chemical development. The company's product portfolio and production processes leverage its powerful patented reactive surface treatment (RST) technology to apply coatings to many non-reactive (nonbondable) and easily flammable textiles, essentially transforming them into durable flame resistant fabrics.

Alexium has also developed a green FR treatment for reactive (bond-able) materials and has begun leveraging its technology to coat materials that could eventually protect military and governmental personnel from the dangers of chemical warfare.

- Alexium's recent partnership with Duro Textiles should accelerate near-term growth. Duro produces nearly four million yards of nylon annually and is one of the military's largest suppliers of textiles.

We believe licensing RST treatment to Duro for a nominal licensing fee of $1 per square yard will result in a meaningful top-line growth for Alexium leading ultimately to profitability.

- Reactive FR technology substantially increases market opportunity. The company is finalizing its testing with reactive materials which will allow the company to provide FR to NyCo (cotton nylon blends) and polyester.

We anticipate this could result in an additional 25-million yards of annual licensing fees from U.S. military uniforms alone.

- The company's coating processes often require unique microwave curing techniques it has patented, while at other times, normal oven-baking processes suffice, depending on the reactive nature of the fabrics employed.

- Massive and growing FR chemical market. MarketAndMarkets estimates global FR chemical sales will grow to $7.1 billion by 2017, up from $4.8 billion in 2011.

We believe this growing market will be a primary driver in increasing Alexium's distribution channels going forward.

- Potential commercialization and global distribution offer Alexium a long-term growth horizon. Many industrial materials such as carpet use petroleum-based materials. But new stringent fire regulations make RST an appealing solution for the construction industry.

- DoD investment creates an intrinsic value baseline for Alexium. The DoD has invested over $30 million to help develop Alexium's powerful coating portfolio.

We anticipate large specialty chemical companies could be intrigued by Alexium's product line and may attempt to acquire the company to secure its valuable IP.

In short, Alexium is an emerging niche leader in the fire retardant chemical development industry and has partnered with leading military textile manufacturers which should result in accelerated revenue growth in the coming calendar year and potential profitability in 2H2014.

We like these shares at current prices and consequently initiate coverage of them at BUY.