During 2020, Blackstone Resources announced that it had achieved a series of important milestones for producing printed battery cells and solid-state batteries. Following this announcement, Blackstone Resources won grants from the European Commission’s Horizon 2020 programme and Swiss innovation agency InnoSuisse. The company also opened a new battery manufacturing facility in Germany and plans to go into mass production in the summer of 2021.

The company has been investing in the next generation of battery technology for the last few years. It is focused on battery-printing technology, which it believes will be the cornerstone for the future production of solid-state batteries.

Subsequently, AlphaValue revisited its previous target price and BUY rating, which it later adjusted and reaffirmed.

Highlights on recent developments that impacted this new price target:
 

• On 6 August 2020, Blackstone announced that it had manufactured the first functional battery cells with thick printed electrodes. The planning of the first production plant has also begun, which uses production technology that is both more flexible and cost-effective than the current technology used to produce lithium-ion batteries.

• On 1 November 2020, the company commenced operations located at industrial park Am Fuchsloch, Döbeln, Saxony, Germany.  The modern industrial building offers 6,000 square metres of industrial space, which will be used to mass produce 3D-printed next-gen batteries in the summer of 2021.

• On 7 December 2020, Swiss Innovation Agency Innosuisse approved a grant application for Blackstone to part fund its research and development into 3D-printed solid-state batteries.

• On 4 January 2021, Blackstone received a grant from the European Union to participate in Current Direct – A new research and innovation project funded by the European Commission’s Horizon 2020 programme, which will revolutionise the way we move goods and people by water.

The changes AlphaValue has made to Blackstone Resources’ valuation target

Following these news events, AlphaValue amended its target price to CHF 12.60 per share. The peer group that was used during the valuation process includes battery technology names and trades at an average higher price-to-earnings ratio of 44.3 times, in comparison to Blackstone which is trading at 9.72 times at the time this report was published. Meanwhile, an earnings estimate of CHF 0.50 per share was also provided for 2021.

Our management team expects that battery technology will increase significantly as a proportion of our company’s activities as we continue to progress. Therefore, we expect the market will eventually price in these fundamentals, which will inevitably lead to a much higher stock market valuation in the future.

In addition to these metrics, AlphaValue estimated a net asset value of CHF 12.40 per share, which indicates that Blackstone’s share price remains undervalued versus its peer group.

AlphaValue is an independent equity research house that covers over 470 European stocks, split between 32 seasoned analysts. The report is readily downloadable from Blackstone Resources’ website and can be accessed on Blackstone homepage or on Bloomberg’s research portal.