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Zero to $1.3b overnight - Brisbane company in fast lane to power the world

Business

Brisbane company Li-S Energy will hit the market today with the goal of one day helping to power the world’s auto market.

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It’s a lofty goal but the company has battery technology that would reduce the 625 kilos of batteries in a typical Tesla to half that weight, or keep the weight and double the capacity of the battery to 1000 km before needing a recharge.

That message has sunk in with investors who dived in this morning when Li-S Energy started trading. Its shares jumped at the opening of trade from 85 cents at the IPO to $2.15, an increase of 152 per cent. That means it has a valuation of $1.3 billion, double the expectations.

The share price kept rising and was at $2.75 before midday.

Even at this early stage Li-S is talking with manufacturers of products that it said were household names.

The point of difference for the company it that its technology is a lithium-sulphur battery, as opposed to the lithium-ion currently used in most products with a rechargeable battery, including Tesla and other car manufacturers. Lithium sulphur was previously thought to be too unstable and could only maintain about 100 recharging cycles before failing.

However, Li-S is using a technology called boron nitrate nanotubes, a remarkable lightweight substance that is lighter, can withstand much greater heat and is far more durable than lithium-ion. It allows for a battery that the company said has significantly more energy density and lifespan.

It has also brought on board Lee Finniear as its chief executive. For those with a long memory, Finniear was managing director of Metal Storm, a Brisbane company that was trying to develop revolutionary weapons, but collapsed in 2012 with debts of more than $100 million.

Already, institutions have come on board. The likes of Ellerston Capital, Regal Funds, Fifth Estate and EGP Capital on the shareholders’ register of the Brisbane-based company, which is spin-off from commercialisation company PPK.

“It’s been remarkable. The amount of institutional demand for the stock has been a bit overwhelming really,” Finniear said.

“There are two reasons. The whole battery market is expected to go up at least 10 fold in the next 10 years and the institutions understand that lithium-ion is a dated technology that cannot scale to the level that many of the applications really need.”

Before it can appear in any products, Li-S has to optimise the sulphur loading and the amount of BNNT and then pilot production will start.

Finniear said it was difficult to predict when it might appear in a product.

“We are getting a lot of inbound interest from household names and the key thing is we will scale up. We will start with small devices.”

But it’s a very crowded market with different technology being touted by companies that claim to have the edge.

“There is a lot of activity and there’s a good reason for that. There is a tremendous market and it’s growing like crazy,” Finniear said.

“He said the ultimate goal was to be in the broad auto market – cars, trucks, planes, scooters. That is a tremendous goal for us but we also recognise there is growth in drones and aviation where a lighter weight battery has a substantial performance benefit.

“Our stated position is we are not intending to be a battery manufacturer. We are intending to be a technology organisation that develops intellectual property that battery manufacturers can licence from us. We can also supply BNNT and also our allied nanomesh to be able for the manufacturers to produce the batteries themselves.

“Having said that it’s up to where the Federal Government wants to go, where the industry wants to go and whether the country wants a battery manufacturing capability here. If they do we would be a good candidate.”

Li-S’s parent company, PPK, also benefitted today with its share price rising 4 per cent.

 

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