Alexium International Group Ltd's (ASX:AJX, OTCQX:AXXIY) has received updated coverage from Sydney broker Moelis Australia Securities Pty Ltd.
The following is an extract from the report.
Event
After a period of restriction, we have updated our estimates to account for AJX's $6m equity raising to fund development into new markets and categories, take advantage of new sales opportunities and fund working capital.
In addition, AJX announced that it has received a new purchase order from a fiberglass epoxy manufacturer.
Impact
The new purchase order gives us greater confidence in AJX's sales trajectory for its Coatings and Polymers division.
AJX has guided to CY16 revenue of US$4m for the division, split 22% 2H16 and 78% 1H17.
We view the Coatings and Polymers division as the growth driver of AJX in the medium-term, the company estimates the market will reach US$6.6bn by 2019.
Investment View
We reiterate our BUY rating and 12 month target price of $1.20.
We view AJX as a strategic investment leveraging increased scrutiny on stringent fire safety regulations and banning of toxic and harmful chemicals in traditional brominated and halogenated flame retardant products.
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