Altech Batteries Ltd. (ASX: ATC) Research Update – July 2024

Arrowhead has updated coverage on Altech Batteries Limited (“Altech” or ATC or the company) with a fair value bracket of AUD 0.45 – AUD 0.89 per share (share price on July 23, 2024: AUD 0.055) based on a Net Present Value (NPV) methodology.

Report Highlights:

• Altech has a JV agreement with Fraunhofer (September 2022) to commercialize the CERENERGY® Battery and fast tracking its Silumina Anodes™ qualification process.
• Altech’s long-term vision is to construct a Gigawatt battery facility in Saxony, apart from building a 100 MWh plant.
• Altech increased the output capacity of the CERENERGY® project from 100 MWh to 120 MWh per annum in the Definitive Feasibility Study (DFS) completed in March 2024; the project will require an investment of EUR 156 mn, and is expected to generate Net Present Value (NPV) of EUR 169 mn, -Internal Rate of Return (IRR) of 19% and a steady packback in 3.7 years.
• Altech’s Silumina Anodes™ Battery Materials Project’s DFS, which was completed in December 2023, estimates post-tax NPV of EUR 684.8 mn, IRR of 34.6% and a payback period of 2.4 years; the capital cost of the project was estimated at EUR 112.5 mn, while it was expected to generate revenue of EUR 328 mn per annum at maximum capacity of 8,000tpa.
• All the components of the first ABS60 BatteryPack prototype have been fabricated; once the welding of the cells to Cell Contacting System (CCS) is completed, five completed battery modules will be delivered to Fraunhofer; these modules will be mounted to form the first ABS60 BatteryPack prototype, available for testing by potential customers.
• ATC raised USD 3.72 mn under its Share Purchase Plan (SPP) in May 2024 to be utilized for the production ABS60KWh CERENERGY® BatteryPacks prototypes for customer testing and to advance the construction of the pilot plant at Saxony.
• Altech received the final installment of EUR 1.583 mn from the sale of 25% of Altech’s subsidiary Altech Industries Germany GmbH (AIG).