Hi All,2026 is poised to be a game-changer for PPK Group, with...

Hi All,

2026 is poised to be a game-changer for PPK Group, with its investments in Craig International Ballistics (CIB), PowerPlus Energy (PPE), and Li-S Energy (LIS) perfectly aligned with soaring defense budgets and the renewable energy boom. With NATO’s 5% GDP defense target, a $1.01T U.S. budget, and a 3x growth forecast for home batteries, PPK’s portfolio is set to shine. LIS’s role in combat and police body cameras gamechanging:

1. Craig International Ballistics: Capitalizing on Defense Spending

Global defense budgets are surging, with NATO pushing for 5% of GDP (3.5% hard defense, 1.5% security) by 2035 and the U.S. proposing $1.01T for 2026. CIB, a leader in lightweight body armor, vehicle armor, and aircraft armor, is primed to benefit:

• NATO and AUKUS Growth: High-spending nations like Poland (4.5% GDP), Estonia (3.4%), and the UK (2.6% by 2026) are modernizing forces, driving demand for CIB’s ballistic solutions. Their $30M Australian Defence Force (ADF) contract in 2024 proves their ability to secure major deals. AUKUS ties open UK and U.S. markets for vehicle armor in projects like submarines.

• Eastern Europe Demand: Poland and the Baltics need PPE for expanding militaries, and CIB’s cost-effective, lightweight armor can compete with U.S. giants like Point Blank Enterprises.

• R&D Opportunities: NATO’s 20% budget allocation for equipment and R&D offers CIB a shot at European Defence Fund (EDF) grants to develop advanced armor (e.g., graphene-based).

2. PowerPlus Energy: Leading the Home Battery Surge

The home battery market is set to triple by 2026, per Wood Mackenzie, and PPE, PPK’s majority-owned lithium battery maker, is ready to dominate:

• Market Tailwinds: Falling battery prices (Goldman predicts a 50% drop by 2026) and rising energy costs boost demand for PPE’s safe, scalable lithium ferro phosphate (LiFePO4) batteries, ideal for on-grid and off-grid homes.

• Scaling Production: PPE’s plan to grow from 50MWh to 200MWh annual storage capacity, backed by grants, positions them for Australia’s residential boom. Their Melbourne facility (80+ employees) serves 300+ distributors across Australia and New Zealand.

• Tech Edge: The LiFe4838P’s 15% capacity increase and advanced battery management system (BMS) ensure reliability, giving PPE a competitive advantage. The new Whispr7 for the home market is ready to take advantage of the Federal grant.

3. Li-S Energy: Revolutionizing Combat and Police Body Cameras

LIS, PPK’s stake in lithium-sulfur battery technology, is a game-changer for drones and especially body cameras used in combat and policing, offering lightweight, long-lasting power with no thermal runaway risks:

• Lightweight Power for Body Cameras: LIS’s lithium-sulfur batteries deliver 400 Wh/kg energy density (vs. 260 Wh/kg for lithium-ion), slashing weight by up to 30% compared to traditional batteries. For combat body cameras (e.g., used by NATO special forces) and police body cameras (deployed by 1,400 U.S. departments and South Africa’s Border Management Authority), this means less bulk for officers and soldiers, improving mobility during extended missions.

• Extended Runtime: LIS batteries can power body cameras for 20+ hours of continuous recording (vs. 12–16 hours for lithium-ion), critical for prolonged operations like military patrols or police shifts. For example, South Africa’s BMA uses body cameras for 16-hour border patrols, and LIS could extend this to a full 24-hour cycle, reducing downtime and recharging needs.

• No Thermal Runaway: Unlike lithium-ion batteries, LIS’s lithium-sulfur chemistry eliminates thermal runaway risks, a major safety advantage in high-stress combat environments or police operations where overheating could cause fires or failures. This makes LIS batteries ideal for rugged, high-stakes settings, meeting strict NATO and law enforcement safety standards.

• Drone Synergies: LIS’s lightweight batteries also extend drone flight times (e.g., 55+ minutes vs. 30–40 minutes for DJI Matrice 350 RTK), supporting NATO’s surveillance needs and police applications like Axon Air’s Phoenix Open deployments. This dual-use tech strengthens LIS’s market appeal.

• Defense and Public Safety Growth: The global drone market (20% annual growth through 2026) and body camera adoption (e.g., 7,000 U.S. agencies, 1,400 with drones) signal huge demand. LIS’s ADF-funded R&D aligns with AUKUS and NATO tech priorities, positioning them for contracts in 2026.

4. PPK’s Strategic Synergies

PPK’s 51% stake in PPE, 39% ownership of CIB, and 43%+ stake in LIS create a diversified portfolio across defense, energy, and advanced tech. Synergies between LIS’s battery tech, PPE’s LiFePO4 and Whispr7 systems, and CIB’s armor could lead to integrated solutions (e.g., LIS-powered smart armor). Australia’s AUKUS commitments amplify PPK’s sovereign capability focus.

Why 2026?

• Defense Boom: NATO’s 5% target and U.S.’s $1.01T budget fuel CIB’s contract pipeline.

• Battery Surge: PPE’s expanded capacity captures Australia’s home battery market.

• Body Camera and Drone Innovation: LIS’s lightweight, long-lasting, thermally safe batteries revolutionize combat and police applications.

• PPK’s Vision: Synergies across CIB, PPE, and LIS position PPK as a leader in high-growth sectors.

PPK’s triple play in defense, renewables, and advanced batteries makes it a top ASX pick for 2026

With the long awaited IPO of WGL coming into play, holding large amounts of PPK could be a boom in '26 if in fact they do IPO. Big year for PPK target price for?

Bull Case: $3.18 (960% upside) if all subsidiaries exceed targets and market sentiment is strong. Just need to monitor CIB’s NATO/AUKUS contracts, PPE’s production scaling, and LIS’s contract announcements to gauge progressBear Case: $1.05 (250% upside) if competition and delays hinder growth.The base case assumes realistic growth aligned with defense spending (NATO’s 5%, U.S. $1.01T), home battery demand (3x growth), and LIS’s early commercialization, supported by PPK’s strategic synergies.