From Clay - December 9, 2015
Quantum Materials Corp. Update (OTCQB: QTMM) - Vista Partners Initiates Coverage with $0.45 Price Target
Vista Partners initiated research coverage on Quantum Materials Corp. today with a price target of $0.45. The 14-page report makes a compelling argument for owning QTMM shares at this time and provides comprehensive background information on the current state (and near term growth potential) for quantum dot materials in the display industry (also for lighting, solar, anti-counterfeiting and life science applications) as well as the key competitive differentiators and product capabilities of Quantum Materials Corp. including: Product Quality and Performance Characteristics; Volume; Price; and Continuing R&D/Product Improvements.
"We arrive at a $0.45 twelve-month price target for QMC using a DCF-driven analysis. Our price target assumes $15M in revenues in 2016 and positive cash flow by 4Q16. We may seek to revise our price target higher upon quarterly results that exceed our projections."
"QMC believes it is well positioned in all four areas described above. The Company believes its QDs, including cadmium/heavy metal-free QDs, meet or exceed its competitor’s current brightness and purity specifications, and their QDX™ Quantum Dots significantly exceed any known competitive product for heat, oxidation and moisture resistance. They believe that their patented continuous manufacturing process allows them to produce large volumes at competitive price points while also giving them the ability to quickly scale up capacity and locate it anywhere in the world it is needed. Lastly, its continuing relationships with universities such as Rice, University of Arizona, and Texas State University, private and public labs such as LANL and its approach to joint development ventures should enable the Company to achieve and maintain a leading position in R&D and commercialization of new products."
Here is a link to today's press release: http://www.otcmarkets.com/stock/QTMM/news/Vista-Partners-Initiates-Coverage-on-Quantum-Materials-Corp---Ticker--QTMM----0-45-Price-Target?id=121112&b=y
The report is available for download at: http://www.vistapglobal.com/
Over the past year (and post CES 2015, which exhibited a large fleet of next generation QD driven 4K panels from several OEM's), quantum dots have entered the market quickly and proven to be a commercial success in extending the value of the LCD display market (as well as the massive in-place infrastructure/dedicated fabs that manufacture this type of display). To support this thesis, we cite the tremendous success and consumer uptake of Samsung's quantum dot infused SUHD line, which looks to be taking business from both sides of the aisle ( ie: upselling consumers from lower priced LCD's, as well as taking sales away from higher priced OLED models) and we expect that trend to expand significantly going forward as additional OEM display manufacturers enter the game to get their slice of the next generation "premium priced" LCD display market.
We will be joining the QTMM team at CES again in early January 2016 and will be putting together a sequel to our 2015 CES Travel Digest report. Once completed we will be sure to get you a copy.
In the meantime, see below links to four recent industry articles that show a clear path for continued acceleration of quantum dot adoption in flat panel display tech in 2016 and beyond. As this industry grows, we expect Quantum Materials Corp. to gain a material market share in what looks to be a very lucrative high-margin business. QMC's ability to produce large volumes of high performance spec quantum dots at a low operating cost, as well as their ability to scale-up quickly and at low CAPEX in relation to other competitors in the space should provide competitive advantages for building a large sustainable business in this exciting new "super-materials" format -especially considering the fact that they are now partnered up with Japan based Nitto Denko, arguably one of, if not the world's largest producer of opto-electronic films supplying all corners the OEM display market space.
SD Torrey Hills Capital
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