ajx.jpg

Alexium International Group Ltd

(ASX:AJX)


 

  Our Initial Entry
Price

Portfolio Initiation

5 Day VWAP
After Initiation

Current Price

Our Current Returns

ASX:AJX
$0.060
$0.053
Mar 03 2020
$0.058
$0.066
    10%

ASX:AJX
Our Current Returns
10%


Investment Memo: Short summary on why we invested (30th July 2021)

============================

What does AJX do?

Alexium International (ASX: AJX) has developed and is selling advanced performance chemicals for cooling and fire resistance.

AJX commercialises its advanced performance chemicals by partnering with and selling its technology to manufacturers in a specific market (bedding, textiles, military uniforms etc).

AJX partners with manufacturers that then on-sell products to end customers with AJX’s thermal management or fire resistant chemicals applied.

What is the macro theme behind AJX?

IP-backed technology with the potential to enter the lucrative US defence market.

Why did we invest?

Coliton Capital investment in AJX: Colinton Capital Partners is a well known private equity firm that specialises in taking a “hands on” approach to its investments. Colinton seeks to grow the companies it invests in from $100M's market caps to multiple billion dollar companies. We hope Colinton Capital can help AJX take this journey.

Established, revenue generating business: A stable revenue generating company to hedge against market volatility

Adaptable technology, primed for growth: With a strong sales pipeline and a strategic decision to engage with new markets, we think that AJX is primed for growth.

What do we expect the company to deliver in 2022?

Objective #1: Cash-flow positive. AJX is currently earnings (EBITDA) positive. If AJX can fund its growth from revenue generating products, it will be less reliant on capital markets for funding.

Objective #2: New Markets: Cooling Technology: AJX’s cooling technology, Eclipsys™, is foundational for the next phase of AJX’s growth into new markets.

Objective #3: New Markets: Flame Resistance Technology: we want to see the existing IP leveraged and AJX launch into different market segments.

What could go wrong?

Sales risk: AJX sells directly to the manufacturer, not to the customer. This means that AJX will need to ensure that its manufacturing partners have a marketing strategy in place to commercialise products that use AJX’s technology. AJX’s could have the best product in the world, but if it is not marketed property it could hurt its top-line sales.

Technology risk: Although AJX has IP for its unique chemicals, it’s possible a competitor or larger chemical company enters the market with a similar or better product.

Funding risk: Although AJX is EBITDA positive, it does have ~US$2.5M in borrowings to pay down. A market crash combined with slow sales could impact its ability to pay down this debt.

What is our investment plan?

We have invested in AJX three separate times over the last 18 months and have built our long term position.

Our view is that the current share price doesn’t reflect the progressive value added to this business from quarter to quarter over the last year.

We plan to hold AJX as it demonstrates commercialisation traction across its six different market segments, something which we believe could see the share price re-rated at least 500% from our initial entry. At this point we will look to free carry and take some profit while maintaining a long term position for the next 2+ years.

=================== Investment Memo ends====================

We will asses the performance of this company against this initial investment memo in each update commentary we provide. This Investment Memo is current at 30th July 2021

============================================================

AJX Corporate Milestones

Portfolio Launch
📅 Revenue Up 20% (FY21 Results)
📅 [NEW] Sales Revenue up 40% Cash Receipts up 70% (Jun-Sep Quarter 2021)
🔄 [NEW] Continued upward sales trend (Oct-Dec 2021 quarter)
🔲 Continued upward sales trend (Jan-Mar 2021 quarter)
🔲 EBITDA Positive (Jan-Mar 2021 quarter)
🔲 Cash Flow Positive (Apr-Jun 2022 quarter)
🔲 Unexpected Positive Announcement 1
🔲 Unexpected Positive Announcement 2
New Technology Development 1: Perpetual Cooling
New Technology Development 2: Biobased Cooling Material
🔲 New Technology Development 3
🔲 New Technology Development 4
🔲 New Technology Development 5
🔲 New Technology Development 6

🧊 Cooling Market 1: Bedding

✅ Intent to enter a new market
✅ Design/Combine AJX chemistries
✅ Successful product testing
Sign Manufacturing Partnership #1: Softex
🔲 Sign Manufacturing Partnership #2
✅ First Revenue
Increased Revenue
Increased Revenue (2)
🔲 Develop multiple end uses in market

🧊 Cooling Market 2: Body Armour

Intent to enter a new market
✅ Design/Combine AJX chemistries
🔄 Successful product testing
🔄 Sign Manufacturing Partnership #1
🔲 Sign Manufacturing Partnership #2
🔲 First Revenue
🔲 Increased Revenue
🔲 Develop multiple end uses in market

🧊 Additional Cooling Market(s)

🔲 Intent to enter a new market
🔲 Design/Combine AJX chemistries
🔲 Successful product testing
🔲 Sign Manufacturing Partnership #1
🔲 Sign Manufacturing Partnership #2
🔲 First Revenue
🔲 Increased Revenue
🔲 Develop multiple end uses in market

🧯Flame Retardant Market 1: Military Uniforms

✅ Intent to enter a new market
✅ Design/Combine AJX chemistries
🔄 Successful product testing
✅ Sign Manufacturing Partnership #1: Pine-Belts
🔲 Sign Manufacturing Partnership #2
🔲 First Revenue
🔲 Increased Revenue
🔲 Develop multiple end uses in market

🧯Flame Retardant Market 2: Bedding

✅ Intent to enter a new market
✅ Design/Combine AJX chemistries
✅ Successful product testing (UL Testing Complete)
🔲 Sign Manufacturing Partnership #1
🔲 Sign Manufacturing Partnership #2
🔲 First Revenue
🔲 Increased Revenue
🔲 Develop multiple end uses in market

🧯Additional Flame Retardant Market(s)

Intent to enter a new market
🔲 Design/Combine AJX chemistries
🔲 Successful product testing
🔲 Sign Manufacturing Partnership #1
🔲 Sign Manufacturing Partnership #2
🔲 First Revenue
🔲 Increased Revenue
🔲 Develop multiple end uses in market

Next Investors AJX Investment Milestones

✅ Initial Investment: @ 6c
✅ Increased Position: @ 6c
Increased Position: @ 5.49c
🔲 Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
🔲 Price increase 2000% from initial entry
✅ 12 Month Capital Gain Discount
🔲 Free Carry
🔲 Take Profit
🔲 Hold remaining Position for next 2+ years

”Expected Company Milestones” are based on the company's publicly available execution plan and some assumptions made by our team on potential announcements that should de-risk the investment. “Our investment milestones” show our current long-term investment plan. Early stage investments are risky and there is no guarantee that the expected events will occur. The lists are not in sequential order.

Key

🔲 Expected Milestone
✅ Achieved Milestone
🟩 Above Average Result
🟨 Average (Expected) Result
🟧 Below Average Result
🟥 Negative Result
🌎 Macro Event
⚔️ Results from Other Company / Project
🔄 In Progress
[UPA] Unexpected Positive Announcement
[NEW] New Milestone Added



Our Past Commentary on Alexium International Group Ltd


Type Date New Title
Mention 11-Dec-2021 $ 0.070 What Happened This Week? Dec-11th-2021
Email 08-Dec-2021 $ AJX Announces First Body Armour Contract - Breaks into New Market
Mention 25-Oct-2021 $ 0.090 What Happened This Week? Oct-23rd-2021
Email 19-Oct-2021 $ AJX posts best quarter yet - upward sales trend led by cooling tech. CEO says more to come.
Mention 18-Sep-2021 $ 0.078 What Happened This Week? Sep-18th-2021
Mention 28-Aug-2021 $ 0.078 What Happened This Week? Aug-28th-2021
Email 27-Aug-2021 $ 0.072 AJX financials released early: the progress is in numbers & more announcements to come says CEO
Mention 14-Aug-2021 $ 0.079 What Happened This Week? Aug-14th-2021
Email 12-Aug-2021 $ 0.077 AJX emerges from year-long quiet phase with first announcement in ages. More to come says CEO
Mention 31-Jul-2021 $ 0.067 What Happened This Week? July-31st-2021
Email 30-Jul-2021 $ 0.063 We have tripled down on AJX - Here is our investment plan.
Mention 24-Jul-2021 $ 0.064 What Happened This Week? July-24th-2021
Email 23-Jul-2021 $ 0.050 Private Equity firm buys AJX shares on market - So we did too
Mention 05-Jun-2021 $ 0.052 What Happened This Week? June-5th-2021
Mention 27-Apr-2021 $ 0.050 Our Portfolio Performance from January 1st to March 31st 2021
Article 29-Jan-2021 $ 0.056 Alexium Delivers 30% Increase in Cash Receipts in December Quarter
Mention 07-Jan-2021 $ 0.054 Our Stock Picks for 2021
Email 05-Dec-2020 $ 0.073 This Week’s News Makers are Riding High
Article 27-Nov-2020 $ 0.063 Cooling Technology for a Hot Market: Why we Invested in AJX
Article 27-Apr-2020 $ 0.060 AJX Partners with US$15B Giant to Commercialise its Flame Retardant Chemistries
Article 15-Apr-2020 $ 0.050 Alexium Inks Exclusive Supply Agreement with Bedding Industry Leader
Article 03-Mar-2020 $ 0.053 Alexium Enters High Growth Phase Targeting Major US Markets



Alexium International Group Ltd Market Data


Latest Article from Alexium International Group Ltd

What Happened This Week? Dec-11th-2021

It’s been an eerie start to December on the ASX, the ASX has been trading on low volumes over the past few weeks, and no matter what announcement a company released, the response seemed muted.

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