PITT STREET RESEARCH UPDATE NOTE: BLUGLASS (ASX:BLG) ALL SYSTEMS GO
BluGlass (ASX:BLG): All systems go
BluGlass (ASX:BLG) is growing customer orders for its first suite of gallium nitride (GaN) lasers. Following product launches at Photonics West in San Francisco in January, several industry-leading customers have purchased, including OEMs in the quantum and industrial segments, and a world-leading energy research institution. All customers are qualifying BLG’s products within their own applications. Once qualified, BLG expects to secure recurring large-volume orders from these customers as well as orders from new customers. BLG is now well-funded to expedite revenue generation having completed a $10.2m capital raise to global institutional and sophisticated investors.
Flexibility is key
BLG has six products in market, spanning violet and blue wavelengths in both single-mode and multi-mode devices. The range enables BLG to serve a diverse range of customers with different end-uses. BLG’s GaN lasers are suitable for several end markets such as machine vision, 3D printing and 3D imaging, quantum sensing and computing, material sensing and flow cytometry, all of which require visible lasers of different power and precision needs.
Validating Fremont
BLG acquired a semiconductor fabrication facility in Fremont, California, in April last year, pivoting from outsourced contract manufacturing. BLG is already reaping the benefits of in-house manufacturing, significantly fast-tracking its development and commercialisation progress, achieving several key operational milestones, and enabling the launch of commercial products. The company demonstrated feasible reliability of over 500 hours back in November with its lasers meeting or exceeding performance benchmarks from contract manufacturers during testing. These steps significantly de-risk BLG’s technical and commercialisation roadmaps and validates the decision to shift manufacturing to an in-house model.
Valuation of US$216.2m/A$324.9m
With BLG securing first sales, we believe it is the right time to value the company. We value 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. Please see pages 13-15 for more on the valuation rationale and the key risks.
Download the full report here: BluGlass (ASX:BLG) All Systems Go
