Graphene Nanochem PLC (fka GRPEF)

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Results for the first six months ended June that were relaeased on September 30 disappointed investors as the company warned on contract delays. The profit warning sent shares crashing by 32.4pc – a decline of 18.375p to 38.375p – in particular it was sluggish signing on the graphene-enhanced biodegradable oilfield drilling fluid that was the problem.

The orders may have been delayed but they haven’t disappeared altogether.

The company said yesterday that it had agreed a second commercial order of its graphene enhanced drilling fluid called PlatDrill. The order signed with Scomi Oiltools and valued at $4.8m is three times the size of the previous contract.

The announcement came alongside an agreement, sealed with Shell Malaysia, to provide a palm oil-based biofuel additive for diesel products. The contract is for one year starting in November to provide 5m litres per month of PlatAmber. However, the biofuel additives are not graphene enhanced and are lower profit margin.

Jespal Deol, chief executive, is confident that the contract wins now underpin revenues for 2015. Sales are expected to rise about 50pc next year from a target of around £50m this year and a larger proportion of those sales, thought to be in the region of 30pc, will come from higher profit margin PlatDrill products.

Graphene Nanochem is a high-risk investment but if those sales come through as expected, and with new graphene products in the pipeline, the shares are definitely one to watch and we upgrade to buy.

www.telegraph.co.uk/finance/markets/questor/11144349/Questor-share-tip-Graphene-Nanochem-wins-contracts.html