LIS energy floated on the ASX today.
The IPO was heavily oversubscribed. Shares were issued at $0.85.
LIS opened at $2.00, hit a high of $3.05 before settling at $2.33.
By volume it was the 9th hightest traded on the ASX and by value just outside the top 20.
Progress continues
Things are moving in the right direction although this is clearly just the begining of a challenging path for LIS.
What I think would be great to see is a partnership with a drone manufacturer like DJI. If LIS energy could prove their high energy density Li-S batteries in this application they would gain significant promotion and propulsion.
Is this a good opportunity?
I've been looking through the prospectus for the Li-S Energy share issue and I find it an intriguing opportunity. They will commence trading on the ASX on 30 August. I'll try and objectively lay down the pros and risks. I'd be interested in your thoughts.
Offer price $0.85 x 40,000,000 shares = $34,000,000 gross proceeds raised
Total shares on issue would then be 640,200,230 (PPK Aust 45.43%, Deakin uni 13.02%) with a market cap of $544,170,195
What do they do?
Their objective is to develop advanced battery technology based on lithium-sulphur chemistry. They will leverage a technology in their batteries called boron nitride nanotubes to
a. improve battery energy capacity compared to lithium-ion
b. improve cycle life compared to conventional lithium-sulphur chemistry
It is a joint venture between PPK group, BNNT technology limited (who will produce the boron nitride nanotubes) and Deakin university.
Pros
- Huge increase in the rechargable battery market and forecast to grow strongly
- New battery tech is needed to address the limitations with lithium-ion batteries
- Li-S batteries have 5x energy density of standard lithium-ion, they are also lighter, safer, faster charging, greener
- Their use of boron nitride nano tubes to overcome problems with Li-S battery chemistry has been independently verified by TMPR Consulting who found that at 600 charge and discharge cycles the specific capacity of the Li-S Energy Battery has been maintained at about 3x the specific capacity of current lithium-ion batteries (above 60% of it's initial capacity)
- Experienced senior management. CEO Dr Lee John Finniear has more than 25 years experience as a senior excutive has a degree in Civil Engineering and is a PhD in Artificial Intelligence and Geographic Informations Systems. Chief Technological Officer Dr Stephen Rowlands has a degree in Applied Chemistry and a PhD in Electrochemical Supercapacitors for energy storage.
Risks
- Can BNNT technology limited supply boron nitride nanotubes at commercially viable volumes?
- Will there be an alternative, superior technology? Li-S Energy's technology may become obsolete through the investment of it's peers in superior technology.
- Li-S energy is currently at pilot research and development phase. Will they have the ability to scale up to commercial production in a reasonable timeframe?
- Li-S energy are likely to need ongoing funding though capital raises
- Liquidity risk as large proportion (73.93%) of shares will be subject to trade restrictions for 2 years
What will they do with the money raised?
- Further optimise the single and multi-layer Li-S technology and retrofit into one or more products
- About $6,000,000 will be spent on a pilot production line to manufacture batteries and prove benefits in commercial products
- Produce different battery formats
- Total Working Capital $16,500,000