BluGlass — Progress working through reliability issues

BluGlass (AU: BLG)

Last close As at 01/11/2024

0.03

0.00 (0.00%)

Market capitalisation

AUD34m

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Research: TMT

BluGlass — Progress working through reliability issues

BluGlass’s Q122 activity was focused on laser diode product development, primarily working through reliability issues affecting its first-generation product with multiple fabrication specialists. The company also successfully demonstrated the world’s first working tunnel junction laser diodes manufactured using its proprietary RPCVD technology. Management expects that the A$6.1m (net) raised in July should provide a cash runway through to initial customer revenues from laser diode sales.

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TMT

BluGlass

Progress working through reliability issues

Q122 results

Tech hardware & equipment

28 October 2021

Price

A$0.041

Market cap

A$41m

Net cash (A$m) at end September 2021 excluding finance leases and c A$3.3m R&D rebate

5.7

Shares in issue

1,003m

Free float

87.3%

Code

BLG

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

Business description

BluGlass is an Australian technology company that is developing and commercialising a breakthrough compound semiconductor technology for the production of high efficiency devices such as laser diodes, light emitting diodes (LEDs) and micro-LEDs.

Analysts

Anne Margaret Crow

+44 (0)20 3077 5700

Dan Ridsdale

+44 (0)20 3077 5729

BluGlass is a research client of Edison Investment Research Limited

BluGlass’s Q122 activity was focused on laser diode product development, primarily working through reliability issues affecting its first-generation product with multiple fabrication specialists. The company also successfully demonstrated the world’s first working tunnel junction laser diodes manufactured using its proprietary RPCVD technology. Management expects that the A$6.1m (net) raised in July should provide a cash runway through to initial customer revenues from laser diode sales.

Year end

Revenue (A$m)

EBITDA
(A$m)

PBT*
(A$m)

EPS*
(c)

DPS
(c)

Yield
(%)

06/18

0.7

(3.8)

(3.8)

(0.97)

0.00

N/A

06/19

0.4

(5.1)

(5.1)

(1.21)

0.00

N/A

06/20

0.7

(3.6)

(4.8)

(1.01)

0.00

N/A

06/21

0.4

(4.6)

(6.8)

(0.94)

0.00

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

BluGlass’ first generation laser diode prototypes show lasing results consistent with commercial specifications for output power and wavelength, demonstrating the soundness of its epitaxial process. However, problems in the post-epitaxial processing steps carried out by third parties resulted in a gradual loss of light output over time during reliability tests carried out in June. Since then, BluGlass has conducted extensive failure analysis and burn-in-testing on packaged devices and implemented two new design iterations that deploy improvements to the third-party metalisation and optical facet related steps. These new devices will go through extended reliability testing in the coming weeks. BluGlass is also working on ensuring process and product repeatability across manufacturing suppliers to ensure supply chain readiness ahead of commercial manufacture.

In August BluGlass successfully demonstrated the world’s first working tunnel junction laser diodes manufactured using its proprietary remote plasma chemical vapour deposition (RPCVD) technology. The uncoated, unpackaged prototype devices showed good lasing behaviour. While further development work is required to optimise the design and performance, this milestone helps confirm the potential of the RPCVD laser diode designs for higher power, more efficient, high value, gallium nitride laser diodes for use in commercial applications such as 3D printing and industrial welding. These higher power laser diodes are key to management achieving its goal of securing 6–10% of the global laser diode market by 2026, which it estimates will then total US$658m (A$876m).

In July BluGlass raised A$6.1m (net) through an oversubscribed entitlement offer to existing shareholders and placement, both at A$0.03/share. Operating activities during Q122 consumed A$2.7m cash, leaving A$5.7m cash at the end of September. This total excludes a c A$3.3m R&D tax refund that management expects to receive by the end of October. There is no debt other than lease liabilities as a A$2.0m loan facility was repaid in full in July 2021.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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