We believe that factors are finally aligning to support adoption of Nanoco Group Plc's (LON:NANON) quantum dots in the 250m+ unit per year TV and computer display markets. With a large addressable market and an operationally geared model, it does not take aggressive assumptions for earnings to scale and the rating to look very inexpensive. We believe a substantial re-rating upwards would be justified as support for our estimates builds.
Quantum dot uptake cycle in display to hit its stride
Quantum dots (QDs) significantly enhance the colour range of LCD displays, enabling a picture quality competitive with the rival OLED technology with better energy efficiency. Implementing the technology requires little disruption to the established LCD TV supply chain and therefore the cost is substantially lower than OLED. Market analysts’ adoption forecasts vary but at the mid-point, QD TV shipments are forecast to grow from c 5m in 2017 to nearly 50m by 2020, which we estimate equates to a market opportunity for QD materials of $550m by 2020.
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