Pitt Street Research publishes Update Research Note: BluGlass Ltd (ASX:BLG): Building a bright future
BluGlass (ASX:BLG) continues to gain momentum in the development and commercialisation of its gallium nitride (GaN) lasers since launching first products to market earlier this year. With product enhancements, vertical integration progressing and several customers qualifying BLG’s products within their own applications. Once qualified, BLG expects to secure recurring and larger-volume orders, and orders from new customers.
BLG also continues to advance its product portfolio, to address gaps in the market and establish itself as an emerging partner of choice in the rapidly growing market. The company is showcasing improved GaN lasers at Europe’s pre-eminent industry conference, Laser World of Photonics. BLG, with its collaboration partner the University of Santa Barbara California (UCSB), has also made significant improvements to its GaN Distributed Feedback Laser (DFB) demonstrations using its proprietary RPCVD technology for longer-wavelength demonstrations. GaN-based DFB lasers are not commercially available in visible wavelengths at this time, but BLG could potentially offer this in the future. The company will feature an updated GaN DFB white paper at Laser World.
Fremont vertical integration is nearly complete
BLG acquired a semiconductor fabrication facility in Fremont, California, in April last year, pivoting from outsourced contract manufacturing. This move is significantly fast-tracking development and commercialisation progress. As of late June 2023, BLG has nearly completed vertical integration. Production has been transferred from four out of five contract manufacturers and the move from the final contract manufacturer is in advanced stages.
Valuation of US$216.2m/A$324.9m
In light of the developments over the past few months, we reiterate our valuation of BLG at US$219.2m or A$324.1m at current exchange rates, using an M&A model. This equates to A$0.20 per share. We are confident that the company can re-rate towards our target range as its sales continue to ramp up and the GaN lasers sold earlier in the year become fully qualified.
Download the research note here: PSR BluGlass Update Note 20 Jul 2023
Read all BluGlass Research here: www.pittstreetresearch.com/bluglass