Thin Film Electronics — First product design taped out

Ensurge Micropower (ENSU)

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NOK0.31

0.02 (6.90%)

Market capitalisation

NOK784m

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Research: TMT

Thin Film Electronics — First product design taped out

Following the strategic shift announced in January 2020, Thinfilm is using its proven printed technology to develop solid-state lithium microbatteries with the intention of manufacturing them in volume in its roll-to-roll (R2R) production facility. Consistent with this strategy, earlier this week the company announced it had taped out its first product design, which is optimised for form-factor constrained applications, and signed technology evaluation agreements with potential customers and partners.

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TMT

Thin Film Electronics

First product design taped out

Commercialisation update

Tech hardware & equipment

28 January 2021

Price

NOK0.60

Market cap

NOK625m

Net debt ($m) at end September 2020 (excluding $1.6m restricted cash and $12.5m financial lease liabilities)

7.8

Shares in issue

1,041.2m

Free float

84.6%

Code

THIN

Primary exchange

OSLO

Secondary exchange

OTCQB

Share price performance

Business description

Thin Film Electronics’ solid-state lithium battery technology combines advanced energy cell design with proprietary materials and manufacturing innovation to produce thin, flexible batteries that can power safer and more capable hearables and wearable devices.

Analyst

Anne Margaret Crow

+44 (0)20 3077 5700

Thin Film Electronics is a research client of Edison Investment Research Limited

Following the strategic shift announced in January 2020, Thinfilm is using its proven printed technology to develop solid-state lithium microbatteries with the intention of manufacturing them in volume in its roll-to-roll (R2R) production facility. Consistent with this strategy, earlier this week the company announced it had taped out its first product design, which is optimised for form-factor constrained applications, and signed technology evaluation agreements with potential customers and partners.

Year end

Revenue ($m)

EBITDA

($m)

PBT*
($m)

EPS*
($)

DPS
($)

P/E
(x)

12/16**

3.8

(36.9)

(42.7)

(0.07)

0.00

N/A

12/17**

5.9

(50.9)

(54.5)

(0.06)

0.00

N/A

12/18**

3.4

(49.3)

(54.3)

(0.93)

0.00

N/A

12/19**

1.2

(30.6)

(35.9)

(0.61)

0.00

N/A

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

The new ultra-thin microbattery product is for applications such as hearing aids, earbuds and wearable medical devices where the high energy density, enhanced cycling and improved safety features that Thinfilm’s technology provides should be able to command a premium compared with conventional batteries. The product has been defined following discussions with potential customers and partners, some of which it has already signed technology evaluation agreements with. The company is also engaging with potential customers for sports and fitness wearables and defence applications.

Now the company has defined its first product and established a provisional route to volume revenues, commercialisation is entering a new phase. This is focusing on refining the individual processing steps to increase energy density, ensure consistently high cycle life and enable production in high volumes. In parallel, the operations team has started a programme to transfer process technology from the sheet-based production line to the much higher volume R2R line, which was previously mothballed. Management’s intention is to have the R2R line able to support anticipated volume delivery of batteries to customers and partners later this year and into 2022.

Thinfilm raised $3.4m (gross) during May and June and a further $6.7m (gross) between July and September. In December management estimated the cash raised by these programmes, including partial exercise of warrants, extended the company’s cash runway through Q121, with further exercise of warrants issued as part of these programmes potentially extending the runway deeper into FY21.

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