I used chatgpt's deep research functionality to provide an analysis of PPK. I had to manually remove the links and some images to get it to format correctly so if bits and pieces dont line up correctly, this might be why.



For those interested, here's what it thinks -

I'll conduct a thorough comparative analysis of PPK Group Ltd (ASX: PPK) against similar companies, both public and private, across its key business segments: BNNT technology, Li-S batteries, and Craig Ballistics. This includes an evaluation of the viability of these technologies, expected commercialization timelines based on comparable developments, and an assessment of fair value and potential valuation scenarios over 1-year, 3-year, 5-year, and 10-year horizons using a weighted valuation approach.

I will factor in industry benchmarks, past commercialization timelines of similar technologies, and macroeconomic conditions affecting advanced materials and energy storage sectors. Expect a detailed analysis covering market positioning, technical feasibility, competitive threats, and financial implications. I'll update you when the research is complete.

Introduction

PPK Group Ltd (ASX:PPK) is an Australian technology incubator focusing on advanced materials and energy solutions. The company’s portfolio spans cutting-edge segments including boron nitride nanotubes (BNNT), next-generation lithium-sulfur (Li–S) batteries, and defense applications through Craig International Ballistics. This report provides a comparative analysis of PPK’s progress and prospects in each segment relative to global peers. We examine the commercialization viability and timelines for BNNT and Li–S technologies, benchmark PPK against competitors, and assess the financial outlook using scenario-based valuations over 1, 3, 5, and 10-year horizons. Key risks and strategic considerations are also discussed, leading to a conclusion on whether PPK’s current market valuation reflects its potential and if it offers a compelling investment case.

1. Boron Nitride Nanotubes (BNNT) – Viability & Competitive Landscape

BNNT Commercialization Prospects: BNNTs are a novel nanomaterial analogous to carbon nanotubes but composed of boron and nitrogen. They boast exceptional properties – stronger than any metal or carbon fiber, flexible, heat-resistant up to ~900°C, chemically stable, electrically insulating, and capable of neutron radiation shielding. Such attributes open use-cases in aerospace, defense, electronics, energy storage, and advanced composites. However, BNNTs have been notoriously difficult and costly to produce at scale. They were first synthesized in the mid-1990s, but commercialization lagged for decades as production methods yielded only milligram quantities at exorbitant prices. This long gestation is typical for new materials – historically ~20 years from discovery to commercial use – as seen with carbon nanotubes which took two decades to reach multi-ton production. Until recently, BNNTs remained laboratory curiosities due to low yield and high cost (often thousands of dollars per gram).

PPK’s BNNT Breakthrough: PPK (via its 51%-owned BNNT Technology Ltd) appears to have overcome the key production hurdles, positioning it at the forefront of BNNT commercialization. The company reports a world-first low-cost manufacturing process for high-quality BNNT, finally cracking the code to make BNNT at commercially viable scale and price. This achievement – developed with Deakin University researchers over a 10-year effort – has dramatically lowered BNNT unit costs and enabled output in gram-to-kilogram quantities. Figure: Molecular model of a Boron Nitride Nanotube, a cylindrical lattice of boron (green) and nitrogen (blue) atoms. PPK’s BNNT process reportedly produces such nanotubes in pure form and in volumes sufficient for industrial testing, a feat “no one else in the world, including NASA, have been able to achieve” according to PPK’s chairman. This is validated by early commercial traction – in April 2023 BNNT Tech signed a collaboration with TenCate Advanced Armour, a global armor materials supplier, which agreed to purchase an initial batch (250 grams) of BNNT for testing in its ballistic protection products. This marks BNNT’s entry into real-world applications (lighter, stronger body armor), and importantly, it signals that PPK can deliver BNNT in meaningful quantities for customers. Management notes that high production cost had been “one of the biggest obstacles” but recent process improvements achieved a “lower cost of production to create a more accessible price point” for industry. Overall, PPK appears to have de-risked the scientific viability of BNNT fabrication – a major milestone toward commercialization.

Competitors & Benchmarking: Despite BNNT’s promise, only a few entities globally have made progress toward commercial supply. PPK’s BNNT technology is arguably among the leaders. In the US, BNNT, LLC (a NASA-affiliated startup in Virginia) was an early pioneer supplying BNNT for R&D, but their process remained small-scale and costly. Another notable peer is BNNano, Inc. (North Carolina, US), a private startup claiming to be “the only company in the world with a commercially viable BNNT manufacturing process”, having drastically cut costs and patented a modified BNNT (“NanoBarb”) to prevent tube clumping. BNNano has already introduced BNNT additives for aluminum alloys and polymers, demonstrating 70% strength improvements in metal composites with just 0.4% BNNT loading. This validates the game-changing reinforcement potential of BNNTs and mirrors PPK’s own “Strategic Alloys” project which infuses BNNT into aluminum/titanium alloys for aerospace-grade materials. BNNano’s progress (multiple pilot product shipments and an active customer pipeline) suggests a commercialization timeline measured in a few years, not decades – a trajectory PPK aims to follow or exceed. Other players include research agencies (e.g. Japan’s NIMS, Canada’s NRC/Tekna) and specialty chemical firms exploring BNNT, but none have reported matching PPK’s scale or cost breakthroughs. In sum, PPK’s BNNT venture is at least on par with the global front-runners. With its production facility in Geelong ramping up (a dedicated 1000 m² space at Deakin’s Waurn Ponds campus), PPK is poised to move BNNT from lab to market.

Market Adoption & Timeline: Given BNNT’s prior scarcity, initial commercialization will focus on high-value niche applications where its unique properties justify a premium. Likely early markets include defense (body armor, armor glass), aerospace (thermal resistant composites), and electronics (heat-dissipating substrates). PPK’s TenCate armor trials in 2023 are a first step in the defense sector. If these tests validate superior protection at lower weight, one could see small-volume BNNT orders converting to larger supply contracts in 1–3 years (e.g. for soldier armor or armored vehicles). In aerospace, BNNT-enhanced materials could appear in the latter half of this decade for thermal shielding or structural components – PPK has been showcasing BNNT at industry events (e.g. Paris Air Show) to cultivate such opportunities. Broad market penetration will depend on further cost reductions and scale-up. For context, carbon nanotubes transitioned from ~$500/gram in early 2000s to ~$50/kg in the 2010s as production scaled by orders of magnitude. A similar cost trajectory for BNNT (perhaps from hundreds of dollars/gram down toward single-digit dollars/gram over time) could unlock mass-market uses. PPK’s management believes BNNT commercialization may come sooner than the market expects, hinting at near-term revenue streams. Indeed, the first BNNT product sales are already starting – the TenCate deal is for delivery in 2023, and other partners (including Boeing, via a white graphene/BNNT R&D collaboration) are in the wings. Nonetheless, widespread adoption will take time to materialize. The most likely scenario is a steady ramp: modest BNNT sales in the next 1–2 years for testing and prototypes, then accelerating commercial uptake around the 3–5 year mark as customer confidence builds. By the 10-year horizon, if BNNT’s promised benefits are realized in multiple industries, PPK’s BNNT venture could mature into a major materials business with substantial market share in advanced composites – a prospect that underpins significant upside in PPK’s valuation (discussed in Section 4).

2. Li–S Energy (Lithium-Sulfur Batteries) – Technology Progress & Industry Context

Technology Overview: Lithium-sulfur batteries are widely seen as a leading “beyond Li-ion” energy storage technology due to their very high theoretical energy density (up to 5x Li-ion) and the abundance/low cost of sulfur as a cathode material. A Li–S cell uses a lithium metal anode and a sulfur (S₈) cathode, which yields tremendous specific capacity (~1675 mAh/g for sulfur vs ~200 mAh/g in typical Li-ion cathodes). Lithium ions (blue) shuttle between a lithium metal anode (left) and a sulfur-rich cathode (right), forming lithium polysulfides (yellow/black clusters) as intermediate species. The chemistry promises lighter batteries and lower costs (sulfur is cheap and environmentally benign). However, technical challenges have so far prevented Li–S from reaching commercial viability. Chief among these is the “polysulfide shuttle” effect – intermediate lithium polysulfides dissolve and migrate, causing rapid capacity loss and low cycle life. Additionally, the lithium metal anode tends to form dendrites (metal filaments) which risk short-circuits and also limit lifespan. These issues led to poor rechargeability: traditional Li–S prototypes often failed after <100 charge cycles. Indeed, the foremost Li–S pioneer, UK-based Oxis Energy, despite two decades of R&D and promising 400 Wh/kg cells, collapsed in 2021 largely because it couldn’t achieve sufficient cycle life for commercial deployment. This underscores that while Li–S chemistry is scientifically sound, turning it into a practical, long-lasting battery is the critical hurdle.

Li–S Energy’s Progress: Li–S Energy Ltd (ASX:LIS) – ~48% owned by PPK – appears to have made significant strides in addressing the above challenges. The company has integrated BNNT nanomaterials into its battery design as a stabilizer for the sulfur cathode and separator. According to Li–S Energy’s CEO, this innovation allows their cells to mitigate the polysulfide shuttle and dendrite issues, dramatically improving cycle life. In testing, Li–S Energy’s prototype cells have surpassed 450 charge-discharge cycles with minimal degradation – a world-first for Li–S chemistry. For perspective, a typical lithium-ion battery manages ~500 cycles (and most prior Li–S cells died out well under 200 cycles). Achieving ~450 cycles signals that Li–S Energy is closing the gap on longevity, moving the technology into a range viable for real applications. The cells also demonstrate the classic Li–S advantages – lighter weight and higher energy: Li–S Energy claims its batteries can deliver an EV range of up to 1000 km or keep a smartphone running for a week per charge. If those performance metrics hold at scale, it would indeed be a step-change in battery technology. The company has filed patents on the BNNT-enhanced cell design, indicating a tangible intellectual property edge. Moreover, Li–S Energy is already preparing for manufacturing scale-up: an initial pilot production line is planned at Deakin University’s ManuFutures facility, with support from the Victorian government. All these signs point to Li–S Energy moving out of the pure R&D phase into the early commercialization phase in the next 1–2 years.

Competition in Next-Gen Batteries: The race for the next dominant battery chemistry is crowded, with multiple technologies and companies vying to surpass lithium-ion. Li–S is one of the frontrunners, but it competes with solid-state lithium batteries, lithium-air, sodium-ion, and others for attention and funding. Notably, several high-profile U.S. startups (often backed by automotive OEMs) are pursuing solid-state lithium metal batteries – e.g. QuantumScape, Solid Power, SES – which aim for higher energy density and safety by using solid electrolytes. While different in approach, they target similar applications (EVs) and face similar timeline challenges. Within the lithium-sulfur domain, Li–S Energy’s peers include:

• Lyten, Inc. (USA): A private company focusing on Li–S cells enhanced with a proprietary 3D graphene-based cathode matrix. Like Li–S Energy, Lyten targets the polysulfide shuttle issue by using advanced nanomaterials in the cathode. Lyten reports achieving energy density ~20–25% higher than today’s best Li-ion (NMC) already, with a roadmap to double Li-ion energy density long-term. It is initially focusing on niche markets – drones, satellites, military applications – rather than EVs, as these tolerate shorter cycle life and benefit greatly from weight savings. This strategy parallels Li–S Energy’s likely path (start with high-value, cycle-life-tolerant use cases). Lyten is also notable for claiming its Li–S cells can be made on existing Li-ion production lines, which could ease industrial adoption. While Lyten’s detailed cycle life data is undisclosed, its progress and significant funding signal a strong competitor on a similar timeline.

  
  

• Oxis Energy’s Successors: After Oxis’s failure, its Li–S IP was acquired by Johnson Matthey in 2021. Johnson Matthey subsequently pivoted away from batteries, but that IP (now possibly under OXLiD/Gelion in the UK) could resurface. So far, no new commercial venture has emerged from Oxis’s ashes, implying Li–S Energy and Lyten remain ahead of any UK efforts. In Germany, a startup called Theion has publicized plans for Li–S cells with a unique solid-state design, but details are scant and it’s earlier-stage than Li–S Energy.

  
  

• Legacy Battery Players: Major battery makers (Panasonic, CATL, LG, etc.) mostly remain focused on improving Li-ion (e.g. high-nickel cathodes, silicon anodes) for the next 5+ years. Some have research programs in Li–S or lithium-air, but none are yet at prototype stage comparable to Li–S Energy’s. It’s likely that any OEM interest in Li–S will manifest via partnerships or investments in companies like Li–S Energy once the tech is proven at pilot scale.

  
  

In summary, Li–S Energy stands out as one of the few publicly-listed pure plays in lithium-sulfur technology, with a demonstrated breakthrough in cycle life that many others have struggled to achieve. Its key differentiator – the use of BNNT nanomaterials – appears unique and gives it a competitive edge. If its forthcoming pilot plant can produce battery cells that replicate the lab results, Li–S Energy could leapfrog many peers in the timeline to market.

Commercial Feasibility & Adoption Timeline: Despite the technical progress, commercialization of Li–S batteries will be a gradual, stepwise process. The conservative nature of the battery industry (which values safety and longevity) means Li–S must prove itself in incremental stages. We expect initial commercial adoption in niche markets by ~2025–2027. Likely early adopters include: defense and aerospace (where weight reduction justifies higher costs and somewhat shorter cycle life) and specialty electric vehicles like high-altitude drones or eVTOL aircraft that prize energy density over longevity. These use-cases can tolerate ~300–500 cycles if the energy-to-weight benefits are compelling. In fact, the Australian Department of Defence is already a stakeholder via Deakin, and one could envision field trials of Li–S batteries in military drones or portable power packs once Li–S Energy’s cells are production-ready. Mainstream EV adoption, however, will take longer. Auto OEMs have massive sunk investments in Li-ion gigafactories and are understandably cautious about new chemistries. Industry experts estimate it could be 5–15 years before next-gen batteries like solid-state or Li–S see broad automotive use. Li–S Energy’s best-case scenario might be to secure an OEM partnership in the next 2–3 years (if it can demonstrate, say, a 500+ cycle cell at >500 Wh/kg). That could lead to pilot EV models using Li–S in the late-2020s. But even then, volume production for cars may not occur until the 2030s when existing Li-ion tech truly reaches its limits. In the meantime, Li–S could find nearer-term revenue in areas like grid storage if its cost per kWh undercuts Li-ion (sulfur is cheap, and Li–S avoids expensive metals like cobalt/nickel). Li–S Energy is also exploring semi-solid state designs (using solid electrolytes) to further improve safety and lifespan – if successful, that could accelerate adoption. Overall, we expect meaningful revenue for Li–S Energy to ramp up around the 3–5 year horizon: small commercial sales (prototype batteries, specialty orders) in ~1–2 years, scaling to larger contracts or licensing deals in ~5 years as performance gains are validated. By 10 years, if Li–S technology delivers on its promise, it could capture a notable slice of the multi-billion dollar battery market, which would be transformational for PPK’s valuation (given its large equity stake in Li–S Energy).

3. Craig International Ballistics & Other Ventures – Defense Market Impact

Craig International Ballistics (CIB): This is PPK’s 45%-owned ballistic armor manufacturing business, which provides a more traditional, cash-generating complement to the high-tech BNNT and Li–S ventures. CIB is Australia’s largest manufacturer of personal body armor and composite ballistic protection, supplying military and law enforcement agencies. Its product range includes bullet-resistant vests, ballistic plates, combat helmets, and armored glass and vehicle panels. CIB has an entrenched position with the Australian Defence Force (ADF) – for example, it recently secured a A$30 million order to supply body armor to the ADF, beating international competitors. The company also won contracts to armor the new Hunter-class navy frigates (supplying ballistic windows), highlighting its broadening reach in defense projects. These wins underscore CIB’s strong reputation for quality and reliability (it has “consistently delivered on time, on budget” per Defence QLD reports) and suggest it will continue to be a key domestic supplier as Australia boosts defense spending.

Market Potential & Performance: While the ballistic protection market is competitive globally (with players like Safariland, 3M Ceradyne, and MKU Ltd), CIB benefits from a degree of import replacement and sovereign capability priority in Australia. The defense sector’s high entry barriers (stringent testing, certifications like NIJ standards) also protect established suppliers. CIB has been operating at nearly full capacity, indicating robust demand. In FY2022 it delivered approximately A$16 million in revenue with its manufacturing operations near 100% utilization. Management has visibility on a strong pipeline of orders that should keep throughput high for at least the next three years. Given its current scale, CIB is likely generating a few million dollars in profit (exact figures are not disclosed, but PPK acquired its stake at a ~$10M valuation implying a low single-digit millions EBITDA at the time, and Blue Ocean Equity analysts note CIB is now “3x more profitable” than at acquisition). This steady cash flow is strategically important – it helps fund PPK’s R&D ventures and corporate costs, reducing reliance on external capital. In essence, CIB (along with the recently acquired PowerPlus Energy) provides an “anchor” valuation for PPK: even if BNNT and Li–S take longer than expected, CIB’s ongoing business supports a baseline value. CIB’s growth potential, however, is somewhat modest and tied to defense procurement cycles. Over a 5-year horizon, it could expand via new product lines (e.g. tactical helmets, vehicle armor kits) or exports to allied militaries, but it’s not expected to become a vastly larger business without significant capacity expansion or technology differentiation.

Synergies & Strategic Value: Interestingly, CIB stands to benefit from PPK’s BNNT technology, creating a virtuous circle within the group. Advanced nano-materials like BNNT can be used to develop lighter, stronger armor – for instance, BNNT-reinforced composites or ceramics for bulletproof vests and panels. PPK’s BNNT has already attracted TenCate (a major armor solutions company) as mentioned, and CIB could be a natural partner or testbed for integrating BNNT into next-gen armor products. A successful BNNT armor would be a major differentiator for CIB in winning contracts (since militaries constantly seek weight reduction for soldier protection). Moreover, PPK also has a 40% stake in a Ballistic Glass venture aiming to infuse BNNT into bullet-resistant glass for vehicles and aircraft. This aligns with CIB’s offerings (CIB is supplying armored glass to Navy ships) and could enhance performance (improved multi-hit resistance or lighter transparency). Thus, CIB is not just a financial backstop for PPK but also a strategic platform to commercialize BNNT applications in defense. This synergy could multiply CIB’s market potential if breakthroughs are realized – for example, capturing a larger share of the ~$2 billion global body armor market with superior BNNT-enhanced gear.

Other Ventures: PPK’s portfolio includes several smaller investments, each with their own market prospects, which collectively add value and diversify risk:

• PowerPlus Energy (51% stake, with path to 75%) – A manufacturer of lithium battery storage systems (for residential and industrial off-grid use). Unlike Li–S Energy, PowerPlus makes conventional LiFePO₄ battery units and is already commercial and profitable. With the renewable energy storage boom, PowerPlus is growing; comparable Aussie firms like Redflow and RedEarth have valuations of ~$45m and $100m, respectively, and PowerPlus actually has higher revenue than both. This suggests PowerPlus alone could be worth a significant fraction of PPK’s market cap if spun-out or fully valued by investors. It provides immediate revenue (supporting PPK’s cash needs) and an eventual exit opportunity if PPK scales up to full ownership.

  
  

• White Graphene Ltd (59% owned) – Developing large-scale production of hexagonal boron nitride nanosheets (aka “white graphene”). This is essentially a sister technology to BNNT (2D sheets vs nanotubes) with applications in coatings, lubricants, and hydrogen storage. White Graphene is slightly behind BNNT in commercialization but recently raised capital at a ~$73m valuation, indicating substantial investor interest. If successful, it opens another multi-billion dollar market (coatings, composites) and complements BNNT (often the materials can be used together for thermal or mechanical enhancements). PPK’s stake here could become valuable in its own right over a 5–10 year frame, and initial partnerships (even Boeing has shown interest via a space sustainability grant) are underway.

  
  

• Advanced Mobility Analytics (32.5% owned) – An AI software venture for traffic safety analytics (uses computer vision to predict crashes). While not core to PPK’s materials theme, it’s an example of PPK’s opportunistic investment strategy. AMA is at the commercialization stage with a SaaS product for city road management. Its value to PPK is more long-term and it could be an IPO candidate if it gains traction globally (smart city tech).

  
  

• Other R&D projects (each ~40–45% owned) like “3D Dental” (BNNT-enhanced dental implants), “Strategic Alloys” (super-strength Al & Ti alloys with BNNT), and “BNNT Precious Metals” (reinforcing gold/silver for jewelry) are earlier-stage and essentially exploratory at this point. They demonstrate the breadth of BNNT’s potential uses. Any one of these, if a breakthrough occurs, could spawn a new venture. While it’s prudent not to assign much value to them yet (they are currently at concept/prototype phase), they represent upside options that could add incremental value over a 5–10 year period.

  
  

In aggregate, Craig International Ballistics and PPK’s other commercial ventures provide a foundational value and mitigate risk. CIB and PowerPlus generate real revenues now, supporting a baseline valuation for PPK and reducing dilution risk (PPK can fund some R&D internally). Strategically, CIB and the BNNT/White Graphene projects reinforce each other in the defense sector, which could amplify PPK’s value proposition if integrated solutions emerge.

4. Financial & Valuation Outlook (1, 3, 5, 10-Year Horizons)

Valuing PPK is inherently challenging due to its collection of early-stage tech investments with binary outcomes. A scenario-weighted approach is appropriate – assessing PPK’s worth under various success/failure scenarios for its key projects, and then probability-weighting those outcomes. We employ multiple valuation methods (sum-of-parts using comparables, DCF for future opportunities, and industry multiples where applicable) to triangulate fair value estimates at 1, 3, 5, and 10-year horizons.

• Near-Term (1-Year) – Sum-of-Parts Base Value: Over the next year, PPK’s valuation will be dominated by its tangible holdings and listed investments, since large-scale commercialization of BNNT or Li–S is unlikely within 12 months. We can therefore treat it as a sum-of-parts of its current businesses, with some option value for its emerging tech. PPK’s 47.7% stake in Li–S Energy (ASX:LIS) alone was valued at A$79.7 million as of mid-2023 when LIS shares traded around $0.26. (Note: LIS shares now trade near $0.11–0.12, so that stake is ~$34m at present – still roughly equal to PPK’s entire market cap at A$0.34/share or ~$30m.) Additionally, PPK owns majority stakes in BNNT Tech, White Graphene, PowerPlus, and 45% of Craig Intl Ballistics. Using recent transactions and peer benchmarks: BNNT Tech’s value can be inferred from White Graphene’s $73m round (BNNT is arguably more advanced, potentially in the $100m+ range if it raised capital); PowerPlus’s peers suggest a value of $50–100m (PPK will own 75% of it); Craig Ballistics was acquired at $10m and, given its growth and 3-year order visibility, could be worth closer to $30m now. Summing these parts, an illustrative base-case valuation for PPK’s assets easily exceeds A$150m (even discounting the unlisted ventures), which translates to ~$1.98 per PPK share. In fact, a recent independent analysis concluded “on a simple fair value basis PPK is worth at least $1.98 per share” in a base scenario. This significantly exceeds the current market price ($0.34), indicating the market is heavily discounting PPK’s future opportunities and perhaps pricing in a high probability of failure. Even accounting for the drop in LIS share price, PPK’s net asset value (including cash) likely supports a stock price well above $0.50. Therefore, at a 1-year horizon (2025–26), one could reasonably expect PPK’s fair value to approach $1–2 per share, assuming no further deterioration in its listed holdings and modest progress in commercialization (which could start unlocking some value). This 1-year view relies mostly on comparables and asset valuations rather than earnings (since PPK’s near-term earnings will be negligible or negative as it reinvests in R&D). It’s essentially a sum-of-parts with a venture-capital style uplift for the derisking milestones achieved so far. Conclusion (1-Year): PPK appears undervalued on a sum-of-parts basis, and any positive news (e.g. a new BNNT supply deal or a strategic investor in BNNT/Li-S) could catalyze share price closer to the $1+ range. We note that analysts covering PPK have 12-month price targets around A$2.35 (mean estimate), which reflects a weighted blend of asset value and some probability of success in the pipeline.

  
  

• Mid-Term (3-Year) – Initial Commercialization Scenario: Over a 3-year horizon (to ~2028), we factor in the first meaningful commercialization of PPK’s breakthrough technologies. By this time, we anticipate that BNNT Tech will be generating initial revenues from product sales (perhaps tens of kilograms of BNNT sold annually for defense or aerospace uses), and Li–S Energy will either be in pilot production with early adopter sales or have licensed its technology to a major battery player (earning royalties or JV income). These developments would reduce the uncertainty around the ventures and allow more traditional valuation metrics to be applied. For BNNT Tech, one could project a DCF based on ramping sales: e.g. if by 2028 it sells 100 kg of BNNT at, say, $1000/gram (price likely to decline, but still high for specialty grade) that’s $100M revenue; with high margins (nanomaterials often 50%+ gross margin), it could be profitable. Even at a smaller scale (a few million in sales), the fact of revenue and customer adoption would warrant valuing BNNT Tech like a high-growth advanced materials company – perhaps at 5–10x revenue. Similarly, Li–S Energy’s valuation by year 3 will hinge on whether it’s proven its batteries in real-world trials. If yes, the market may start pricing it not on current revenue (which might still be low) but on strategic value (the TAM of EV batteries). We’ve seen how pure-play battery tech firms (e.g. QuantumScape) commanded multi-billion dollar valuations well before revenue, based on expectations. It is plausible that by 2028, Li–S Energy could be valued in the several hundred million to $1B range, if it secures a major development agreement or shows batteries ready for EV integration. PPK’s 48% stake would accordingly be worth perhaps $150–480m (assuming LIS valuation $300M–$1B). For our mid-case, let’s assume partial success: Li–S is valued at $300M (reflecting progress but not full success), BNNT Tech at $200M (with some commercial traction), White Graphene at $100M (post scale-up), PowerPlus at $60M (growing storage biz), Craig at $30M. PPK’s share of these would sum to roughly $300m+ in equity value, which equates to about $3.30 per share (using ~90m shares). Even applying probability weights – say a 50% chance of that success scenario, 50% of a base case – yields a weighted value around $2.0–2.5 per share. This is consistent with the notion that PPK’s “commercialisation and value creation from BNNT, White Graphene and Li–S [is] likely sooner than the market realises”. Notably, Blue Ocean Equities (June 2023) projected a risk-adjusted target of $2.35 in 1–2 years, with an upside scenario of ~$5.60 if Li–S succeeds fully. By year 3, as uncertainties reduce, one would expect the market to price a higher portion of the upside. Conclusion (3-Year): We estimate a fair value in the $3–4 per share range (unrisked) if milestones are hit, with a probability-weighted value around mid-$2s. This suggests substantial stock appreciation potential from current levels, albeit contingent on execution. The mid-term valuation would likely be supported by a mix of EV/revenue multiples for BNNT/White Graphene (as early-stage tech manufacturers) and DCF/outcome-based valuation for Li–S (given its binary nature – either a major licensing deal or not by then). We also expect by 3 years PPK might consider spinning off or listing BNNT Tech or White Graphene separately to unlock value (similar to how Li–S Energy was spun out via IPO), which could crystallize some of these valuations.

  
  

• Longer-Term (5-Year) – Scaling Up Success: Five years out (2030), PPK’s profile could transform dramatically if its ventures execute. In a bullish scenario, by 5 years BNNT Tech could be moving from pilot to scaled production (hundreds of kg annually) and be a leading supplier of BNNT globally, and Li–S Energy could be on the cusp of large-scale manufacturing (perhaps in partnership with a battery giant) with its cells designed into next-generation EV or aerospace platforms. In such a scenario, these businesses would command valuations commensurate with their growth and strategic importance. For instance, if Li–S batteries are proven and a gigafactory is planned, Li–S Energy could be valued akin to a high-growth battery manufacturer – possibly multi-billion dollars (note: QuantumScape reached >$10B at its peak hype; even today it’s ~$3B without a commercial product). BNNT Tech, if it dominates BNNT supply, could likewise be a unicorn (a $1B+ valuation) given the breadth of industries it can impact (aerospace composites, electronics, etc. – each multi-billion markets). That would make PPK’s share of each on the order of $0.5B. Summing across the portfolio, one can envision a blue-sky outcome where PPK’s look-through valuation in 5 years is $1–2B (i.e. potentially $10+ per share). Of course, one must discount that by the substantial execution risk. A more conservative outcome by 5 years is that one of the two major bets succeeds while the other maybe lags or underperforms. Even if only one hits big, PPK’s stake in that one could be worth several hundred million, still yielding a total valuation perhaps in the high hundreds of millions. To ground this with some numbers: suppose in 5 years Li–S Energy achieves $100M revenue (from early adopters, small EV/dronescale deployment) with a 20% EBITDA margin; at a sector EV/EBITDA multiple of ~15x, Li–S Energy would be worth $300M, nearly double today’s market cap. Now add BNNT: if BNNT Tech captures markets in composites and pulls $50M revenue at high margins, at 10x sales it’s $500M value. PPK’s share of these two alone would be ~$400M. Then there’s White Graphene, PowerPlus, etc., which could add another ~$100M+. Discounting to present (at a high venture WACC) would still yield a sizeable current value. We can also apply a probability-weighted DCF: assume 30% chance Li–S succeeds (leading to, say, $50M annual free cash flow by year 10) and 40% chance BNNT succeeds (leading to $30M FCF by year 10), plus base businesses worth $20M FCF (from stable PowerPlus/CIB). The expected value in year 10’s cash flows might be $35M, which DCF back at 15% gives roughly $135M enterprise value today ($1.5 per share). That seems low relative to our other methods because it heavily discounts the upside. On the flip side, a scenario analysis where Li–S and BNNT both hit and are valued richly (coupled with PPK possibly monetizing some stakes) yields much higher valuations. Conclusion (5-Year): We anticipate that by 5 years, if PPK’s thesis is proving out, the market capitalization could reasonably reach the high hundreds of millions (AUD). A fair value range might be $5–6 per share (risk-weighted), with bull case >$10 and bear case (if all tech fails) perhaps back to ~$1 (underpinned by residual traditional businesses). Investors at that stage would likely value PPK on a blend of EV/EBITDA (for its now-mature segments like CIB/PowerPlus) and revenue or tech multiples for BNNT/Li-S, or even PE ratios if these units become profitable. By year 5, PPK might transition from a pure “story stock” to a company with real earnings (if, say, Li–S licensing royalties or BNNT product profits start coming in).

• Very Long-Term (10-Year) – 2035 Outlook: A decade ahead, the divergence between success and failure scenarios becomes even more extreme. In an optimistic view, by 10 years BNNT and Li–S could each be widely adopted in their industries, making PPK’s investments true game-changers. For instance, if Li–S batteries begin displacing Li-ion in EVs by the mid-2030s, Li–S Energy (and thus PPK) would benefit from enormous demand – the EV battery market is projected to be $300+ billion by 2035, so even a few percent share for Li–S would translate to billions in sales. Similarly, if BNNT composites are mainstream in aerospace and defense, BNNT Tech might be generating nine-figure revenues. In this blue-sky scenario, PPK’s shareholdings could generate substantial profits and potentially be spun off or sold to larger players at high valuations. We cannot rule out PPK itself becoming an acquisition target if its technologies succeed (for example, a major defense contractor could buy BNNT Tech for its strategic materials, or a battery conglomerate might acquire Li–S Energy). It’s conceivable that PPK’s stock could be an order of magnitude higher than today under such circumstances (i.e. multi-billion dollar valuation vs current ~$30M). However, the risks and unknowns over a decade are also significant. Technologically, a new disruptive innovation could emerge that outcompetes Li–S (for example, solid-state batteries might win out, relegating Li–S to niches), or BNNT could face competition from other nanomaterials (like graphene or carbon nanotubes improving). There are also scaling risks – sometimes a lab breakthrough doesn’t translate to low-cost mass production (though PPK is tackling that head-on in BNNT’s case). We should also consider regulatory and environmental factors: by 2035, there may be tighter regulations on nanomaterials (workplace safety for BNNT handling, etc.) or on battery supply chains. Financially, PPK will need to manage its capital carefully to avoid shareholder dilution as it funds scale-up; missteps in financing or execution could impair value. Therefore, a prudent valuation at 10 years might heavily discount the ideal outcomes. A possible approach is to assign probabilities: e.g. 20% chance PPK is a 10-bagger by 10 years, 30% chance it’s a moderate success (say $3–5 share), and 50% chance the projects don’t fully pan out (stock stays around $1 or below, roughly asset value). The weighted outcome in that case might still be around $3–4. But the skew is notable – the upside is far larger than the downside in magnitude. Conclusion (10-Year): PPK represents a high-risk high-reward long-term bet. Its current valuation implies the market assigns a low probability to mega-success, so any progress over a decade could yield outsized returns. A fair value looking 10 years forward, incorporating industry forecasts and adoption curves, would likely be well above today’s price on an expected value basis (we’d argue an investor could justify an entry price several times the current if they believe, say, there’s even a 1-in-3 chance PPK’s tech hits mainstream). In summary, by 2035 PPK could either be a case study of Australian innovation spawning globally significant businesses – or a case where promising science didn’t translate to commercial gain. Our valuation exercise leans towards the former potential, as the risk-adjusted outlook still appears positive (the optionality on breakthrough success is worth more than zero, and right now the market is almost treating it as zero). It is worth noting that PPK’s own strategy likely involves monetizing or exiting investments well before 10 years (as stated, they aim to commercialize then exit at the right time). So investors may see crystallization events (trade sales, spin-offs) that unlock value along the way, rather than having to wait a full decade.

  
  

Valuation Methodologies Applied:

• We used Sum-of-Parts (SOP) to gauge current intrinsic value (valuing listed stake in Li–S at market, using recent capital raise valuations for White Graphene, acquisition cost/upward revisions for CIB, peer multiples for PowerPlus, etc.). This SOP analysis suggests PPK is trading at a substantial discount to the realizable value of its assets, let alone their growth potential.
• We considered Comparable Company Multiples for the more mature or easier-to-benchmark segments: e.g. valuing PowerPlus against other energy storage companies by EV/Revenue, valuing CIB against defense suppliers by P/E or EV/EBITDA. These comparables show PPK’s stakes have solid baseline worth (for instance, PowerPlus does more revenue and is profitable, yet peers are valued tens of millions, implying PowerPlus could be a significant portion of PPK’s market cap alone).
• For the nascent tech segments (BNNT, Li–S), we looked at precedent transactions and venture valuations (e.g. what valuation did Li–S Energy IPO at, how are U.S. battery startups valued, etc.) and also Discounted Cash Flow projections for scenarios where these technologies reach commercialization. DCF for such high-risk ventures must incorporate probability of success (risk-adjusted NPV). When we do so, even a highly conservative DCF (assigning a low probability and high discount rate) indicates upside to the current price, because the current market cap (~A$30M) is disproportionately low relative to the multi-billion-dollar markets PPK is targeting.
• We also note PPK’s portfolio approach inherently calls for a probabilistic valuation – not every project needs to succeed for the company to be worth significantly more. PPK has “10 investments at various stages of the value creation cycle”, of which several are already commercial or close. This diversification means the overall company’s risk is somewhat mitigated compared to a single-project startup. Traditional valuation would sum the expected values of each venture. By that logic, PPK’s fair value exceeds the current price even if we assume a high failure rate, because the one or two that succeed could be worth many times the initial investment. This asymmetry is what makes the weighted valuation attractive.