Ilika PLC (AIM:IKA, OTCQX:ILIKF) has few competitors in the solid-state battery market and the market is overlooking this, said house broker Liberum.
In a note analysing final results from the battery maker, the broker reiterated its target price of 117p, which is more than double the current share price.
Of Ilika’s solid-state battery (SSB) rivals, three have a different focus, while existing medical battery makers “are yet to develop a solid-state capability”, analyst Sam Wahab said.
The company said it is focused on completing the qualification processes to enable first samples of its Stereax smaller-format SSBs with customers around the end of the year, with initial sales in early 2023.
With the existing Stereax facility, which was completed in December, having capacity to produce 3,500 wafers when ramped up, the analyst said this equates to around 230,000 (M100) batteries and the company “has demand to fill that plant once ramped we believe from circa 20 mini medical device developers”.
Key markets for Stereax are knee/hip replacement monitoring, heart monitoring, neuro-stimulation, smart contact lenses, and hearing aids.
Meanwhile, with Ilika aiming to reach “manufacturing readiness maturity by the end of 2023” for its larger Goliath SSBs, Wahab pointed to growing carmaker and investor interest in SSBs for electric vehicles, driven by test results that indicate superior energy density and charge time compared to today’s li-ion batteries.
“Two of the biggest car makers Toyota and VW have mentioned it is on their roadmaps,” he noted, adding that, “we think first adoption in EVs may come earlier than many think (i.e. 2026/2027) in sports cars”.
Liberum’s target price is based on sales of 260,000 Stereax batteries at £66 apiece by 2025, leading to £17mln revenue, underlying earnings (EBITDA) of £6.8mln and a net present value of £136mln for the Stereax business, with a 12% discount rate applied.