East Coast Research increases Altech Batteries’ valuation on commercialisation progress

The updated valuation estimates a base-case valuation of A$0.17 per share and a bull case of A$0.24 per share for Altech
Thanks to the production of a prototype battery and functional pilot plant, Altech has taken another step closer to commercialisation
As the world increasingly focuses on decarbonisation, demand for innovative battery technologies should continue to grow

Special Report: Over the past year, Altech has made continuous headway towards commercialisation at both the Silumina Anodes and CERENERGY batteries projects in Germany.

Perth-based battery tech company Altech Batteries (ASX:ATC) is dual focused on two different but innovative battery technologies that could make a real impact in both the grid storage market and silicon anode market as the world strives to meet net zero goals.

A definitive feasibility study was completed for the CERENERGY® project in March, outlining robust economics for the construction of an initial 120MWh CERENERGY® grid packs production line in the state of Saxony, Germany.

What is the CERENERGY battery tech all about?

In joint venture with Fraunhofer, the project targets the high-potential grid storage market with its CERENERGY® sodium chloride solid state (SCSS) battery technology which has exceeded expectations in efficiency, stability and performance.

CERENERGY® batteries use common table salt (sodium chloride) and nickel granules as cathode materials, eliminating the need for rare and expensive metals such as lithium and cobalt from the list of required battery materials.

Another unique feature is that it doesn’t contain any graphite or copper in the anode side of the battery – in fact, there is no anode in the CERENERGY® battery.

The anode only forms during the charging process as a molten sodium film between the steel electrode and the outer edge of the ceramic electrolyte.

Similarly, the molten sodium anode dissolves during the discharging process of the battery. Instead of copper as the negative collector in the lithium-ion battery, a steel canister acts as the negative electrode in a CERENERGY® battery.

With the battery storage market projected to grow over 30% CAGR through 2028, East Coast Research believes Altech is well positioned to capitalise in this burgeoning market.

CERENERGY milestones

The first 60kWh CERENERGY® ABS60 battery pack prototype was produced in October, showcasing a lifespan of more than 15 years, twice that of lithium-ion batteries.

Two offtake letters of intent were secured in October and November this year, locking in demand for 30MWh of CERENERGY® grid packs annually from 2026, positioning Altech as a key player in renewable energy.

It also means the first two years of production is spoken for, as well as 50% of the three following years.

The company has also finalised the plant’s process design and has engaged specialised German companies to carry out each step of the CERENERGY® grid packs production process.

Silumina Anodes – the second battery project

The second project involves the development of a lithium-ion battery anode by combining silicon particles with conventional graphite, achieving a 55% increase in energy capacity.

With rising demand for EVs, the silicon-based anode market is projected to grow at a CAGR of 48%, reaching $137 billion by 2036.

Altech has completed a definitive feasibility study (DFS) for an 8,000tpa plant in Germany and has an operational pilot plant, positioning it for rapid commercialisation.

Financially, the project shows strong metrics such as a pre-tax NPV10 of €684m, an IRR of 34% and an annual EBITDA of €105m, indicating robust economic viability.

Uniquely placed with first-mover advantage

Speaking with Stockhead, East Coast Research equity research analyst Aaron Rogers said there aren’t many companies that do what Altech does with both battery technologies based on the company’s own proprietary technology, differentiating themselves from the rest.

“In the previous report we set out some milestones that we wanted Altech to achieve before it would re-rate,” he said.

“These included the production of the CERENERGY® proto-type battery and it’s done that, the company [is] reaching these goals which help to reduce the project’s risk, enhances commercial viability and consequently, our DCF was revised up slightly to reflect this.”

East Coast Research’s DCF model values both the Silumina Anodes and CERENERGY® batteries projects, estimating a base-case valuation of A$0.17 per share and a bull-case of A$0.24 per share.

These valuations are based on assumptions from the respective DFS results of the projects, illustrating Altech’s consistent growth and likelihood of eventual commercialisation.

Other key milestones include the Silumina Anodes pilot plant construction and prototype shipments to end-line customers for testing.

“It’s an interesting time for technologies like these as the world tries to find roots to reach net zero goals,” Rogers said.

“Companies like Altech, if they can get to the commercialisation stage, they should be in a position to help in the global effort to decarbonise.

“The silicon anode market is projected to reach $137b by 2036 and obviously the signing of offtake agreements for CERENERGY® and the build-out of prototypes shows that Altech is on its way to commercialisation and contributing to this growth.”

This article was developed in collaboration with Altech Batteries, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.