Novonix Limited

NVX Details

December 2020 Quarter Highlights: Novonix Limited (ASX: NVX), previously known as Graphitecorp Limited, is involved in providing materials, equipment, and services for the global lithium-ion battery industry. Its subsidiary NOVONIX Battery Testing Services Inc., produces and sells the battery cell test equipment to the battery makers, researchers, and equipment manufacturers. Through its subsidiary PUREgraphite joint venture with, NVX manufactures battery anode materials in US. PUREgraphite anode materials can be used in electric vehicle applications.  

During December 2020 quarter, NVX was added to the OTCQX International Index (OTCQXINT). It now presents at a benchmark for international OTCQX companies. NVX is currently trading on the ASX, OTCQX and Frankfurt exchange (FRA). NVX has started engaging to review its plant and equipment engineering for Phase 2 plant (25000 tpa). The company has made expansions in their staff capability and cell building capacity to support increased workload. The cash outflow from operating activities stood at $1.625 million and the company ended the quarter with a cash balance of $25.28 million. 

Cash Outflow for December 2020 Quarter (Source: Company Reports)

US$5.57mn grant allocated: NVX’s Unit was awarded US$5.57 million grant from U.S. Department of Energy for new technology development. NVX and Harper International went into a strategic alliance to complete thermal processing solutions and technical services essential to produce advanced materials. Through this alliance, NVX will head itself towards commercialization and from research scale to full production line operations.

Outlook: NVX has expansion plans with 2,000 tpa plant and is taking other initiatives with an expansion of their lease for the additional 80,000 sq ft of current facility for the beginning of FY22 or earlier and is engaging on plant and equipment engineering review and design for Phase 2 plant (25,000 tpa). The company is also engaging in multiple potential technology partnership opportunities with international partners to enable faster global deployment of PUREgraphite’s technology. 

Stock Recommendation: The stock recently touched its all-time high of $4.23 and is currently trading at a higher trading level. It has moved up significantly in the last one month, rising 128.09% over the period. On the technical analysis front, the stock has a support level of ~A$1.507 and resistance of ~$3.113. Considering the stock’s significant rise in the past few months, current trading level, negative ROE, history of incurring losses, we give an “Avoid” rating to the stock at the current market price of $2.69, up by 3.461% on 1 February 2020.

NVX Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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