Director, RaaS Research Group, Research as a Service (RaaS)

Research as a Service (RaaS)

Director, RaaS Research Group

Insightful Financial Models and Research Analysis

Connect to the right investors through smart and insightful financial models and research analysis.

Equity Bottom-Up

Amaero International Ltd / Equity Bottom-Up

<div>
<div>
<div>
<div>
<h2>Amaero International Ltd</h2>
<h3>Delivering efficiencies in 3D printing</h3>
<div>
<div>
<div>
<div>
<div class="content-highlight">
<p>Amaero International Ltd (ASX:3DA) creates large format, complex components in metal with laser-based additive manufacturing for the defence, aerospace and automotive sectors. The company, formed in 2013 out of Monash University and listed on the ASX in December 2019, works with several of the world’s leading manufacturers of aerospace and defence products, delivering both design &amp; prototype and manufacturing capability. In our view Amaero is well positioned to capitalise on the global shift towards additive manufacturing to secure efficiencies in high-value, low run manufacturing processes. We initiate coverage with a base case DCF-derived valuation of $179m (42% upside on current market capitalisation) and see considerable upside from 3DA’s partnerships with US defence primes to develop an Australian titanium powder manufacturing facility, a 3D printing centre in the Middle East and for an extended relationship with Fletcher Insulation’s global network.</p>
</div>
<div>
<div>
<div>
<div>
<p><strong>Business model</strong><br>Amaero generates revenue from several sources including the design and prototyping of additive manufacturing solutions on a cost-plus basis; from contract manufacturing and tooling on a price per unit basis; from the sale of proprietary metal 3D printers &amp; equipment and 3D printing metal powders on a cost plus mark-up basis; from post-sales support and maintenance service fees; and from the rights to commercialise patented proprietary alloys developed by Monash University on a price per unit basis. Amaero has the North American commercialisation rights to a range of 3D printing machines, including the world’s largest laser powder bed machine, as well as the powder preparation machines and powder handling and recovery devices. The company owns fully accredited manufacturing facilities in Melbourne, Adelaide and El Segundo, California.</p>
<p><strong>2021 will be a formative year</strong><br>Amaero enters calendar 2021 with several well-advanced projects and prospects including a purchase order from Boeing for the manufacture of evaluation parts, which is expected to lead to an expanded term engagement for the manufacture of components for Boeing’s defence and space divisions; the tooling agreement with Fletcher Insulation which will likely result in Amaero producing a specialist, frequently replaced tool used in making glass fibre insulation initially addressing the local market before expanding to other key target markets globally; the opportunity to supply and manage a proposed 3D printing centre in the Middle East and the chance to develop and operate an Australian titanium powder manufacturing facility. The company has also had some recent contract wins with Nissan and Raytheon.</p>
<p><strong>Base case DCF valuation is $179m</strong><br>We have used the discounted cashflow methodology to value Amaero using a WACC of 13.9% (beta 1.9, terminal growth rate of 2.2%) and this derives an equity value of $179m or $0.90/share on the current share count of 197.6m shares. Note that our modelling anticipates additional capital will need to be raised, resulting in additional shares issued. Valuing early stage companies is always a subjective exercise, particularly when the timing of projects and financing is uncertain. We have sought to apply conservative estimates in our modelling and our base forecasts and valuation focus on announced agreements. We have also modelled but not included earnings estimates for global extension of the Fletcher Insulation tooling opportunity, the proposed Australian titanium manufacturing facility and the proposed US$77m Middle East 3D printing centre. These projects potentially add considerable upside to our earnings forecasts and valuation, and are discussed in this report.</p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>





Amaero International Ltd
Delivering efficiencies in 3D printing





Amaero International Ltd (ASX:3DA) creates large format, complex components in metal with laser-based additive manufacturing for the defence, aerospace and automotive sectors. The company, formed in 2013 out of Monash University and listed on the ASX in December 2019, works with several of the world’s leading manufacturers of aerospace and defence products, delivering both design &amp; prototype and manufacturing capability. In our view Amaero is well positioned to capitalise on the global shift towards additive manufacturing to secure efficiencies in high-value, low run manufacturing processes. We initiate coverage with a base case DCF-derived valuation of $179m (42% upside on current market capitalisation) and see considerable upside from 3DA’s partnerships with US defence primes to develop an Australian titanium powder manufacturing facility, a 3D printing centre in the Middle East and for an extended relationship with Fletcher Insulation’s global network.





Business model Amaero generates revenue from several sources including the design and prototyping of additive manufacturing solutions on a cost-plus basis; from contract manufacturing and tooling on a price per unit basis; from the sale of proprietary metal 3D printers &amp; equipment and 3D printing metal powders on a cost plus mark-up basis; from post-sales support and maintenance service fees; and from the rights to commercialise patented proprietary alloys developed by Monash University on a price per unit basis. Amaero has the North American commercialisation rights to a range of 3D printing machines, including the world’s largest laser powder bed machine, as well as the powder preparation machines and powder handling and recovery devices. The company owns fully accredited manufacturing facilities in Melbourne, Adelaide and El Segundo, California.
2021 will be a formative year Amaero enters calendar 2021 with several well-advanced projects and prospects including a purchase order from Boeing for the manufacture of evaluation parts, which is expected to lead to an expanded term engagement for the manufacture of components for Boeing’s defence and space divisions; the tooling agreement with Fletcher Insulation which will likely result in Amaero producing a specialist, frequently replaced tool used in making glass fibre insulation initially addressing the local market before expanding to other key target markets globally; the opportunity to supply and manage a proposed 3D printing centre in the Middle East and the chance to develop and operate an Australian titanium powder manufacturing facility. The company has also had some recent contract wins with Nissan and Raytheon.
Base case DCF valuation is $179m We have used the discounted cashflow methodology to value Amaero using a WACC of 13.9% (beta 1.9, terminal growth rate of 2.2%) and this derives an equity value of $179m or $0.90/share on the current share count of 197.6m shares. Note that our modelling anticipates additional capital will need to be raised, resulting in additional shares issued. Valuing early stage companies is always a subjective exercise, particularly when the timing of projects and financing is uncertain. We have sought to apply conservative estimates in our modelling and our base forecasts and valuation focus on announced agreements. We have also modelled but not included earnings estimates for global extension of the Fletcher Insulation tooling opportunity, the proposed Australian titanium manufacturing facility and the proposed US$77m Middle East 3D printing centre. These projects potentially add considerable upside to our earnings forecasts and valuation, and are discussed in this report.













Amaero International Ltd: Delivering Efficiencies in 3D Printing

<div>
<div>
<div>
<div>
<h2>Amaero International Ltd</h2>
<h3>Driving efficiencies for defence manufacturers</h3>
<div>
<div>
<div>
<div>
<div class="content-highlight">
<p>Amaero International Ltd (ASX:3DA) creates large format, complex components in metal with laser-based additive manufacturing for the defence, aerospace and automotive sectors. The company works with several of the world’s leading manufacturers of aerospace and defence products, delivering both design and prototype and manufacturing capability. The company was formed in 2013 out of Monash University and listed on the ASX in December 2019 after raising $8m at $0.20/share to give it a market capitalisation at IPO of $35m. Last week, Amaero returned to the equity markets for the first time since IPO, raising $9m at $0.55/share, in an substantially oversubscribed issue with an additional $3m being made available to existing shareholders through a Share Purchase Plan (SPP). The SPP will be partly underwritten by JV partner PPK Group (ASX:PPK). Significantly the company also secured a purchase order from Boeing for the manufacture of evaluation parts, which potentially will lead to an expanded term engagement for the manufacture of components for Boeing’s defence and space divisions. The Boeing order is one of several key contracts Amaero has secured in the past 12 months and underscores the opportunity that the company has to capitalise on the global shift towards additive manufacturing to secure efficiencies in high-value, low run manufacturing processes.</p>
</div>
<div>
<div>
<div>
<div>
<p><strong>Business model</strong></p>
<p>Amaero generates revenue from several sources including the design and prototyping of additive manufacturing solutions on a cost-plus basis; from contract manufacturing and tooling on a price per unit basis; from the sale of proprietary 3D printers and 3D printing metal powders on a cost plus mark-up basis; from post-sales support and maintenance service fees; and from the rights to commercialise patented proprietary alloys developed by Monash University on a price per unit and reoccurring royalty basis. Amaero offers a range of 3D printing machines, including the world’s largest laser powder bed machine to be commissioned in the first quarter 2021, as well as the powder preparation machines and powder handling and recovery devices. The company owns fully aerospace accredited manufacturing facilities in Melbourne, Adelaide and El Segundo, California, and is partnering with defence primes to develop a 3D printing centre in the Middle East and an Australian titanium powder manufacturing facility.</p>
<p><strong>Securing support from the world’s largest defence companies</strong></p>
<p>The company numbers among its clients six of the 10 largest defence companies including Boeing, Northrop Grumman, Raytheon, Thales and Safran. Some of its completed projects include a 3D-printed Apache Helicopter gearbox for Boeing Phantom Works and a 3-D printed jet engine for Safran in collaboration with the CSIRO and Monash University. Last week Amaero announced that it has received a purchase order for the manufacture of metal evaluation parts for Boeing’s defence and space divisions. The order positions Amaero to showcase its capabilities with the opportunity for an expanded manufacturing engagement. The company has also secured in the past 12 months a tooling agreement with Fletcher Insulation and has formed a research joint venture with PPK Group (ASX:PPK) and Deakin University to develop a super strength aluminium alloy utilising specialised nano particles. Amaero has also just announced the appointment of former Australian Federal Minister for Defence, the Hon. Christopher Pyne, to its global advisory board. In his former role, Mr Pyne was responsible for the deployment of more than $200b in defence capabilities.</p>
<p><strong>Look to specialist manufacturers, defence exposure for peers</strong></p>
<p>Amaero is an early stage company with a small but growing revenue base. We consider peers to be other Australian companies with exposure to global defence and aerospace budgets including Electro Optic Systems and Veem, as well as specialist product manufacturers such as technical polymer producer Skellerup Holdings, lithium-ion battery materials developer Novonix and kinetic fusion additive manufacturer Titomic. Amaero also considers the recently relisted (raised US$575m for a US$2.5b valuation) US additive manufacturer Desktop Metal (NYSE:DM) a peer although its focus is on the automotive sector.</p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>





Amaero International Ltd
Driving efficiencies for defence manufacturers





Amaero International Ltd (ASX:3DA) creates large format, complex components in metal with laser-based additive manufacturing for the defence, aerospace and automotive sectors. The company works with several of the world’s leading manufacturers of aerospace and defence products, delivering both design and prototype and manufacturing capability. The company was formed in 2013 out of Monash University and listed on the ASX in December 2019 after raising $8m at $0.20/share to give it a market capitalisation at IPO of $35m. Last week, Amaero returned to the equity markets for the first time since IPO, raising $9m at $0.55/share, in an substantially oversubscribed issue with an additional $3m being made available to existing shareholders through a Share Purchase Plan (SPP). The SPP will be partly underwritten by JV partner PPK Group (ASX:PPK). Significantly the company also secured a purchase order from Boeing for the manufacture of evaluation parts, which potentially will lead to an expanded term engagement for the manufacture of components for Boeing’s defence and space divisions. The Boeing order is one of several key contracts Amaero has secured in the past 12 months and underscores the opportunity that the company has to capitalise on the global shift towards additive manufacturing to secure efficiencies in high-value, low run manufacturing processes.





Business model
Amaero generates revenue from several sources including the design and prototyping of additive manufacturing solutions on a cost-plus basis; from contract manufacturing and tooling on a price per unit basis; from the sale of proprietary 3D printers and 3D printing metal powders on a cost plus mark-up basis; from post-sales support and maintenance service fees; and from the rights to commercialise patented proprietary alloys developed by Monash University on a price per unit and reoccurring royalty basis. Amaero offers a range of 3D printing machines, including the world’s largest laser powder bed machine to be commissioned in the first quarter 2021, as well as the powder preparation machines and powder handling and recovery devices. The company owns fully aerospace accredited manufacturing facilities in Melbourne, Adelaide and El Segundo, California, and is partnering with defence primes to develop a 3D printing centre in the Middle East and an Australian titanium powder manufacturing facility.
Securing support from the world’s largest defence companies
The company numbers among its clients six of the 10 largest defence companies including Boeing, Northrop Grumman, Raytheon, Thales and Safran. Some of its completed projects include a 3D-printed Apache Helicopter gearbox for Boeing Phantom Works and a 3-D printed jet engine for Safran in collaboration with the CSIRO and Monash University. Last week Amaero announced that it has received a purchase order for the manufacture of metal evaluation parts for Boeing’s defence and space divisions. The order positions Amaero to showcase its capabilities with the opportunity for an expanded manufacturing engagement. The company has also secured in the past 12 months a tooling agreement with Fletcher Insulation and has formed a research joint venture with PPK Group (ASX:PPK) and Deakin University to develop a super strength aluminium alloy utilising specialised nano particles. Amaero has also just announced the appointment of former Australian Federal Minister for Defence, the Hon. Christopher Pyne, to its global advisory board. In his former role, Mr Pyne was responsible for the deployment of more than $200b in defence capabilities.
Look to specialist manufacturers, defence exposure for peers
Amaero is an early stage company with a small but growing revenue base. We consider peers to be other Australian companies with exposure to global defence and aerospace budgets including Electro Optic Systems and Veem, as well as specialist product manufacturers such as technical polymer producer Skellerup Holdings, lithium-ion battery materials developer Novonix and kinetic fusion additive manufacturer Titomic. Amaero also considers the recently relisted (raised US$575m for a US$2.5b valuation) US additive manufacturer Desktop Metal (NYSE:DM) a peer although its focus is on the automotive sector.













Amaero International Ltd: Driving Efficiencies for Defence Manufacturers

Australia

Amaero International Ltd manufactures metal working machinery. The Company offers laser-based additive, 3D printing, and other related technologies. Amaero International serves customers in Australia.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Amaero International Ltd (3DA AU)

Amaero International Ltd: Delivering Efficiencies in 3D Printing

Amaero International Ltd Delivering efficiencies in 3D printing Amaero International Ltd (ASX:3DA) creates large format, complex...

Research as a Service (RaaS)

Amaero International Ltd: Driving Efficiencies for Defence Manufacturers

Amaero International Ltd Driving efficiencies for defence manufacturers Amaero International Ltd (ASX:3DA) creates large format, complex...

Research as a Service (RaaS)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)