Rectifier Technologies: Charging Up Electric Vehicles
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“The Green Movement” is the phrase that I have coined for describing the worldwide push towards cleaner cars, cleaner air, cleaner power, cleaner food and cleaner living in general. This push ranges from everything from the Chinese consumer wanting healthier food products from Australia to Australians increasing their consumption of organic foods all the way through to the requirement to build a massive infrastructure network to accommodate the global era of electric vehicles and driverless cars. Let’s not forget all the ingredients in between as well.
This makes for a very powerful thematic and it is typically these type of thematics or as I call them “revolutions” rather than “evolutions” that create the next booms. Think tech boom of 1997-2000 or the China resources boom of 2004-2007 that creates a huge lift in specific industries exposed to the boom.
I strongly believe that if Government’s and car manufacturers have a real desire to revolutionize transportation and energy consumption then so much infrastructure needs to be built around have the capacity to charge these cars, not just time but also for convenience and geographical footprint.
Some of this requirement falls with manufacturers and Tesla has been the leader in this department by building a network of charging stations, however, other manufacturers are behind the curve and need to begin developing a global plan.
This is where Rectifier Technologies (RFT) fits in with their array of electric chargers, industrial battery charges and DC power supplies. The company has been developing a range of advanced products to benefit the adoption and use of electric chargers, overcoming some of the current pitfalls of battery charging.
Currently in development is their Electric Vehicle DC Home Charger (11kW) that can quickly recharge a vehicle without the requirement of an onboard charge in the electric vehicle or the expense of an external AC charger. This should be ready for sales in mid-2018.
In addition to this product is their RT18 rectifier that produces 8.5kW and delivers a power saving peak efficiency of 95.5%. By combining three of these into the QC24S EV charger, it produced 24kW for rapid charging. As the company states it small and compact so wall mounting eliminates need for floor space and its high power factor and efficiency means it generates very little heat, perfect for indoor use. It is ideal for charging stations at shopping centres, hotels, restaurants etc where space is limited and efficiency requirements are greatest.
This QC24S EV charger is currently being tested by BMW in the USA and Germany as well as being tested by Siemens, Allego, RWE and others.
Importantly this has translated into the company enjoying revenue growth of 28% to $8.5 million and a net profit after tax of $1.2 million. This clearly is a small but highly leveraged company to the adoption of the electric car.
Creating a “Green Movement” portfolio is more than just chasing lithium stocks or baby formula stocks, it’s about identifying all the ingredients that go into the “boom” and then diversifying across a range of companies that will benefit in different ways. I don’t know of another ASX listed company (with a market cap of just $32 million) that is at the forefront of benefiting from the explosion in demand for battery charging.
The share price has enjoyed a little positive price movement of late following the break of the year-long downtrend at 1.7c. Given its previous announcements on its electric vehicle chargers sent the share price as high as 5.7c, any positive news from BMW and the like could see a significant re-rating for this well positioned company.
Greg is the Head of Proprietary Trading at Gleneagle Securities and has over 20 years of experience as proprietary trader and high level strategist for the major investment banks including Citigroup, Bankers Trust and Macquarie Bank. He has been involved across all asset classes including commodities, bonds, currencies and equities right across the globe.
After a 10-year career within the comforts of the large investment banks and research firms he branched out on his own to form his own proprietary trading firm successfully building the business into a multi-million dollar trading operation that turned over a billion dollars a year. This same team now runs the proprietary trading desk at Global Prime, risking their own money in line with the firm's and client's capital.
Greg has appeared on CNBC, Channel 9 - Business Sunday programme, a guest columnist for the Australian Financial Review, a regular author for Personal Investor, Wealth Creator and Shares magazine and is the former Treasurer of the Australian Technical Analysts Association.