NEXTDC Ltd (ASX: NXT)

NXT Details

Exhibiting operational excellence through certifications: NEXTDC Ltd recently announced that its B2 Brisbane data centre is the first Australian data centre and the first Asia Pacific colocation data centre to receive Tier IV Certification of Constructed Facility from Uptime Institute. The group highlighted that the main feature of Tier IV certification is Fault Tolerance, and Certification of Constructed Facility shows that the B2 facility has undergone rigorous on-site audit and testing by Uptime Institute to confirm its ability to withstand individual equipment failures or distribution path interruptions and maintain IT operations. It is worth noting that the B2 Brisbane data centre was awarded Tier IV Certification for Design Documents, the precursor certification for Tier Certification of Constructed Facility, early this year. The group had reported for a decent FY17 result with NPAT of $23m (about $21m of rise over FY16) and revenue growth (from ordinary activities) of 32.6% over FY16. NXT stock has moved up about 14.5% in last six months (as at October 06, 2017). We maintain a “Hold” on the stock at the current price of $ 4.58

Dotz Nano Ltd (ASX: DTZ)

DTZ Details

Passing safety evaluations: Dotz Nano is a premier manufacturer of Graphene Quantum Dots (GQDs) with an innovative technology that produces GQDs out of coal and carbon sources for use in a variety of applications that include Medical imaging, Consumer Electronics, Energy Storage, Solar Cell, Data Storage and Anti-counterfeiting. The group has recently announced about successfully passing the Dermatological Safety Evaluation performed by Selvita Ltd (drug discovery company in Europe). This with the result of the previous oral administration test indicate about non-toxicity of GQDs.

Market exposure to potential customers: Dotz Nano has been successful in setting up an USA Distribution & Sales Network via combined arrangements with D.N. Lukens, Case Technologies and Trans Western Chemicals, for commercialisation of GQDs. The group now aims to replicate this network extensiveness in other regions including Australia, New Zealand and Asia. DTZ has also signed MOU with Colorplastic for use of GQDs into polymers and surface modification market. There seems to be a significant potential that can unearth given the fact that the group has developed new cost-efficient GQDs with a significant rise in quantum yield (QY) (>65%), adapted for large-scale manufacturing. The yield is primarily related to the intensity of the brightness from GQDs and thus becomes a key driver in the commercial applications for GQDs. DTZ has also developed a process to tag fuel derivatives with GQDs, which now can be optimally added to fuel derivatives via a patent pending method without an easy wash out from the fuel. The patent application on the specific tagging of fuels with GQDs has been submitted to the patent office. The group had also received commitments to raise $1.5 million via a placement of shares to sophisticated investors at $0.12 per share.

A couple of months back, the group finalised the registration process with Sigma Aldrich to sell its dots (GQD) through Sigma Aldrich’s online and printed catalogues. Primarily, Sigma Aldrich will facilitate the sales of Dotz GQDs to academic, industrial and government research and development laboratories and commercial businesses that use GQDs for research. All these developments signify steps towards group’s successful commercialisation strategy.

DTZ stock has fallen about 59% in last one year but risen 11% in last one month (as at October 06, 2017) at the back of recent partnerships and developments. Given the potential coupled with yet-to-be witnessed profit turnaround performance, we put a “Speculative Buy” recommendation on the stock at the current price of $ 0.14


Half year Results (Source: Company Reports)

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