Modest beginning but Significant Expansion Potential - A Look at ASX's Latest Entrant AML3D

Going public and offering stocks to investors offers a window of opportunity and unlock financial doors for private entities, enhancing their reputation. Though many private companies aspire to launch on stock markets, not all could succeed in hitting the capital markets.

Evidence being many notable companies that pulled the plug on their IPOs last year, including the We Company, Endeavor Group Holdings, Ferretti, KKR & Co, Property Guru, Bitmain Technologies and some more. Besides, the existing uncertain market environment amidst coronavirus pandemic is posing fresh challenges for IPO aspirants.

Also Read Year 2019 in Review: Best and Worst Performing IPOs

Moving against the tide, an Australian start-up, AML3D Limited (ASX:AL3) marked its IPO on 20^th April 2020, raising $9 million with strong backing from institutional investors. Although the Company had a modest beginning in the Australian share market, it has considerable expansion potential.

Know About AML3D Limited (ASX:AL3)

Incorporated on 14^th November 2014, AML3D Limited (ASX:AL3) is an Australian firm specialising in the provision of commercial wide scale “Additive Metal Layering 3D” printing services to Aerospace, Defence, Maritime, and Resources sectors.

The Company has commercialised its wire arc additive manufacturing technology under WAM® trademark, which is a novel metal additive manufacturing technology for the economical production of high performance, large metal components and structures. Notably, the Company’s Contract Manufacturing Centre in Adelaide was the 1^st WAAM (wire arc additive manufacturing facility) to attain ‘Lloyds Certification’ across the world.

Besides, the Company has also developed its own exclusive software, WAMSoft®, which amalgamates engineering design and metallurgical science to completely automate the 3D printing procedure using innovative robotics technology.

The Company intends to use funds raised from the IPO to expand its production capacity, allowing it to service substantial new interest from clients without compromising its capability to deliver under existing contracts.

Moreover, the Company plans to make key investments to:

• expand and relocate Adelaide Contract Manufacturing Centre,
• begin manufacturing unique and trademarked Arcemy® mobile 3D printing modules,
• develop integrated machining to improve outcomes and timeframes,
• enhance its sales and marketing presence in Asia,
• obtain intellectual property protection,
• continue developing specialised software, and
• provide for working capital.

WAM® Steel Products Tougher than Forged Equivalents, Reports AML3D

In a latest update, AML3D reported exceptional results from a third-party, independent testing of its WAM® 3D printing technology. The testing included printing of a series of geometrically shaped specimens of standardised dimensions, enabling direct comparisons of metals produced by traditional methods.

The testing results clearly demonstrated the potential of WAM® process to disrupt the flexible manufacturing space, revealing that the products manufactured had:

• 10 per cent higher Ultimate Tensile Strength (UTS) than the similar steel components produced using traditional forging techniques, and
• over 30 per cent higher UTS than the applicable global standard.

The testing was conducted by NATA (National Association of Testing Laboratories) accredited group, Intertek, on behalf of the Company, following enquiries from several parties interested in understanding the performance of WAM® printed high strength steel components in comparison to more conventionally manufactured parts.

The Company notified that the WAM® process’ potential to offer considerably higher strength on a similar basis or potentially delivering the identical strength with less material usage is of specific interest in the Resource, Defence and Automotive sectors.

The Company will use these results to outline the benefits of WAM® technology to new parties and support further discussions with existing customers.

Let us now discuss how AML3D is establishing its position in the rapidly growing metal additive manufacturing industry in Singapore:

Announced Completion of Internal Testing of 3D Printed Panama Chock for Keppel

Lately, AML3D announced the finalisation of construction and internal testing of a 3D printed Panama Chock for Keppel Corporation Limited, its Singaporean customer. The Company notified that the Panama Chock, utilized in maritime applications, was delivered in January under a paid trial purchase order targeted to evaluate suitability for more substantial future production volumes.

Additionally, the Company informed that the party that was subject of successful in-house testing, will now conduct third party checks, with results likely to be made available during May 2020.

The Company is also in discussions for a further order of Panama Chocks for Keppel.

The Company believes its ability to rapidly deliver an array of high-quality, custom, large components needed for modification, ship building and repair at a competitive price and considerably shorter lead time is potentially of significant value to Keppel.

Expects to Deliver First Arcemy® 3D Printing Module to ST Engineering in May 2020

AML3D anticipates delivery of its first Arcemy® 3D printing module to Singapore Technologies Engineering Ltd in May 2020 under a “rent to buy” agreement. Arcemy units are the Company’s stand-alone, proprietary 3D printing systems created to be supplied as a ‘turn-key’ solutions in multiple industries, including mining, oil and gas, maritime and defence sectors.

Initially, Arcemy® 3D printing module was scheduled to be installed by March end; but amid COVID-19 regulatory changes in Singapore, ST Engineering requested an amendment in delivery date to May end.

Under the agreement, AML3D retains the right to utilise 50 per cent of the Arcemy® module’s capacity via ‘rent to buy’ period to manufacture products for other clients as part of the Company’s plans to establish a presence in Singapore.

ST Engineering has paid around 15 per cent of the contract value as a non-refundable deposit with an additional 30 per cent payable on delivery of the Arcemy® printing module for installation at ST Engineering’s premises. The Company mentioned that ST Engineering will make a final payment on an official handover of ownership of the module at the end of the rental period, contingent on meeting performance requirements and ST Engineering picking up the ownership option.

In a nutshell, AML3D is progressing considerably well with its major Singaporean customers, remaining on track to establish its presence in the nation’s metal additive manufacturing industry. With a strong cash position of about $10 million and industry leading certifications, AML3D offers a strong foundation to comply with the industry demand for its innovative WAM® technology.

AL3 closed the trading session at $0.170 on 24^th Apr