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Alexium International Group Ltd: Broker reiterates Buy recommendation

Published: 20:00 10 May 2016 EDT

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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.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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