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Haydale gets the graphene ball rolling

2016 was a big year for Haydale and broker Cantor Fitzgerald is expecting lots more positive news flow in 2017
Picture of racing car
Super cars are a likely market for the wonder-material

Haydale Graphene Industries PLC (LON:HAYD) is on the verge of adding China to its growing list of territories.

New York-based fund Everpower has invested  £3.12mln so far at 170p per share for a 9.5% stake to fund the expansion.

A final payment of £0.47mln from Everpower is outstanding and after that is received the two companies will begin to work together to market Haydale’s existing range in China and to develop new graphene and nanomaterial products.

Broker Cantor Fitzgerald said the payment from Everpower suggests it is keen to support Haydale’s plans in China, where the opportunity appears substantial for graphene enhanced resins, polymer-based composites and advanced nanomaterial technologies.

 

Chinese connections

Everpower has ‘considerable industrial and market connections in China, alongside access to manufacturing and finance', added the broker, which has a 'buy' recommendation on Haydale with a target price of 230p.

“The initial focus will be on the development, manufacture and marketing of conductive inks, for medical devices and other electronic applications, pressure sensors, wind turbine radial donuts and PLA 3D printing filaments,” it said.

Ray Gibbs, Haydale’s chief executive, recently met with business leaders in China and reported significant interest in conductive inks and silicon carbide, with vehicle makers in particular looking at incorporating graphene for the next generation of cars.

“We are now considering our China infrastructure to meet what is looking like substantial new opportunities for our graphene and nanomaterial products," he said.

 

US also opening up

Elsewhere, Haydale is starting to see the benefits of 2016’s major expansion.

US subsidiary Advanced Composite Materials (ACM) recently won its first contract since it was acquired by Haydale last September.

ACM specialises in silicon carbide whiskers, which are tough and heat resistant so especially suited as coatings for carbon brakes, cookware and now cutting tools.

A global industrial tool manufacturer placed an order worth a potential US$2.6mln over four years. Haydale expects annual revenue to average US$600,000.

The order followed a period stringent testing and opens up markets for tools for the manufacture of land based turbines and jet engine fan blades to name two.

Haydale eventually could pay up to US$7mln for ACM, which prior to Haydale’s acquisition  had sales of US$4mln, an order book of US$4.5mln and 15 customers.

 

Flag planted In Thailand

Haydale recently secured a presence in Asia through the acquisition of Thailand–based ink and composites group Innophene.

One of Innophene’s specialities is a 3D printing resin that allows the addition of colour, an area seen as potentially very fertile for graphene enhancement.

Dubbed as a  'wonder-material', graphene is just an atom thick, is very flexible, heat resistant and a good electricity conductor, but Haydale is keen to emphasise its expertise is to use graphene and other nanaomaterials to boost the performance of existing products.

 

Broker sees big potential in industrial composites

And the largest opportunity may lie with collaborations such as Everpower and others such as US chemicals giant Huntsman.

Haydale is working with Huntsman on a next generation of the US firm’s Araldite resins.

Improvements in conductivity, both heat and electricity of the graphene-enhanced resins have been impressive, and Huntsman apparently sees it as the basis for a new range of industrial composites.

In November, Haydale formally agreed a joint development agreement with Huntsman that would allow it to purchase Haydale's graphene-enhanced master-batches for use in the fields of composites and adhesives, though it would be fair to say progress has been slower than anticipated.

 

--updates for Everpower investment, Cantor comment, share price --

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