Titomic Ltd (ASX:TTT): why we own it

September 28, 2017

Titomic Limited TTT

GICS Sub-Industry Materials

Current Price $0.44

Market Capitalisation ($M) 22

 

As of 28/09/2017 16:00 AEST
 

 

 

What do they do?

Titomic (ASX:TTT) is an Australian additive manufacturing, better known as 3D printing, specialist that helps companies produce goods at industrial scale more efficiently and effectively. It does so through its proprietary, patented process of applying cold-gas spraying of titanium or titanium alloy particles onto a scaffold to produce a load bearing structure called Titomic Kinetic Fusion.

 

Why do we like them?

 

1)  Best-in-class technology and patented

TTT has the competitive advantage of allowing companies to manufacture complex-shaped parts at a higher volume than any other current systems/technologies can. The technology was co-developed with the CSIRO and Force Industries, but TTT has exclusive rights to commercialise the process.

The technology is already patented in Japan and New Zealand, with patents pending approval in Australia, China, Europe, Hong Kong and South Korea. On Tuesday, TTT was granted the US patent thereby providing TTT with the foundation to expand into one of the largest manufacturing economies in the world.

 

2)  Plays to the 3D printing thematic yet has distinct advantages

 

3D printing, also known as additive manufacturing (AM), is the process of creating physical objects direct from 3-dimensional computer aided design (CAD) data using materials that were deposited into a print head or nozzle. 3D printing is still an industry that is still in its infancy, with its use largely restricted to mass production of simple products. However, TTT’s Kinetic Fusion Technology has several distinct advantages from the usual 3D printing process:

 

1. Speed-to-market

Titomic’s machines boast build rates that are exponentially faster than conventional metal 3D printers currently available, allowing production lead time to be cut from days to hours. Customers can create and test prototypes faster, allowing quicker response to market changes, shorter design cycles and benefit from first mover advantages.

 

2.  Quality

According to management, all 3D printing processes involving titanium must be done in an inert gas environment to mitigate oxidation issues which occurs when titanium is melted. TTT’s kinetic fusion process has a distinct advantage in that there is no melting involved, the titanium particles are prayed at supersonic speeds which in turn causes them to impact and bond with the scaffold. The objects created are therefore of higher quality due to reduced exposure to oxidisation risks.

 

3. Complexity capacities

In addition to high volume applications such as sporting goods, automotive, and medical equipment, TTT’s technology could be used to manufacture low volume, customised components for the aerospace and defence sector.

 

The Titomic Kinetic Fusion process also enables bespoke automated production lines which do not require tooling, welding, folding or bending to simplify customers’ supply chain. This results in less design iterations so customers can spend less time troubleshooting.

We have made a 267% return on this investment, with the stock up 120% on its first day of listing.  Given the technology’s distinct advantages and the increasing proliferation of 3D manufacturing, Titomic remains a company which we like in our portfolio.

 

As of the 29th September 2017 this information is accurate. Glennon Capital holds shares in Titomic (ASX:TTT) for client portfolios. The information contained in this article or video is general in nature and does not consider your personal financial situation.  The information is not a recommendation or offer to buy securities.  You are advised to seek professional financial advice prior to making any investment decisions.  The views expressed in this article may change at any time, such is the nature of the investment markets.

 

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Any information has been prepared for the purpose of providing general information only, without taking account of any particular investor's objectives., financial situation or needs, It is not an offer or invitation for subscription or purchase, or a recommendation of any financial product and it is not to be relied on by investors in making an investment decision. Past performance is not a reliable indicator of future performance. To the extent any general financial product advice is provided in this document, it is provided by Glennon Capital Pty Ltd ACN 137 219 866, AFSL No. 338 567. An investor, before acting on anything construed as advice, should consider the appropriateness of such construction and advice having regard to their objectives, financial situation or needs.

 

Phone: (02) 8027 1000

Email: info@glennon.com.au

PO Box R281,

Royal Exchange

NSW, 1225

 

Level 17

25 Bligh Street

Sydney NSW 2000

(c) 2018 Glennon Capital. All rights reserved.