Nanoco’s trading update indicates that the business is making encouraging commercial progress since Dmitry Shashkov took over as CEO in October 2024. If all goes to plan, this should result in further commercial agreements with existing and new customers and applications in H225. Meanwhile, cash burn remains well under control, with net cash of £14.0m at period end versus £15.2m at the interims.

Nanoco’s launch of litigation against LG and announcement of a joint development agreement (JDA) with a second Asian chemicals business provide a further indication of the business’s reinvigoration. Both developments should also provide support for the planned disposal of the trading businesses, where Nanoco is now involved in in-depth engagements with a number of parties. The net impact of litigation costs versus JDA revenues should be broadly neutral on near-term cash burn (£0.5m/month). We believe the current valuation reflects a pessimistic scenario for Nanoco. Quantum dots are still expected to gain significant adoption across sensors and display, Nanoco has significant IP and expertise and its commercial pipeline is growing again. The market cap is broadly equivalent to its net cash position of £15.2m as of 4 April.