Shares in quantum dot technology specialist Nanoco (NANO) have more than doubled on our December tip after the company announced the first major validation of its potential through a licensing deal with US chemicals giant Dow Chemical. This promises to accelerate its development significantly.
Our recommendation was based on the potential for Nanoco's quantum-dot manufacturing technology, which makes minuscule semiconductor material particles without using harmful heavy metals, such as cadmium. Advocates of quantum-dot technology say it is more efficient than other semiconductor technologies while maintaining high performance. So it could transform products from LCD televisions to solar panels, plus LED lighting and backlighting for televisions.
At the time of the tip, chief executive Michael Edelman told us: "We are way ahead of competitors", and the Dow deal seems to confirm this. Dow has signed a global licence to use Nanoco's technology in electronic displays in return for royalties. Production is expected to start in the first half of 2014 at one of Dow's Asian factories. Nanoco will share some of the capital costs for the facility, but analysts at broker Canaccord Genuity think this will be funded by pre-payments from customers or deductions from royalties. Canaccord estimates 2015 revenues of £20.3m and earnings of £10.6m.
