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The ASX has a new drone darling — and a drone double feature, if you can believe it. Boresight (ASX:BST), the Canberra-based maker of target drones built to be shot down, popped on its Wednesday debut, while 1414 Degrees (ASX:14D) halted to announce a Ukrainian drone-battery deal.
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On this week’s HotCopper Wire, Isaac McIntyre and Jonathon Davidson agreed: Aussie investors love drones, and the sector’s run is far from over.
“Boresight arrived at 20cps under B-S-T midday Wednesday, popped +100% on its first day, and then settled down to ~60% up by the bell,” McIntyre said, pointing out that it’s one of the best IPO days for the ASX recently.
The newcomer is already drawing comparisons with old fan-fave DroneShield, he continued, but where DroneShield builds the hardware to detect and shoot down these enemy drones, Boresight manufactures the targets. “Its selling point feels pretty simple: Cheap, highly repeatable, single-use target drones designed to mimic real-world enemy threats and then just be shot out of the sky,” McIntyre explained.
Davidson sees a pattern: “It’s in the same vein, more or less, as KTEK Aerosystems. We saw that list on the ASX last month; it too jumped ~100% on debut.”
“Drones are hot Down Under,” the HotCopper Wire hosts declared, with both agreeing on the idea. “I think we’ve probably referenced DroneShield in like 20% of all episodes we’ve done for HotCopper. Australian investors love drone companies, international investors love Aussie drone companies.”
The big read from JD: “Boresight… so far its chart only goes up and to the right, [though] it’s only been trading for two days.” But, JD noted, KTEK rocketed to an all-time high after about two weeks before settling at “a clear psychological anchor price of 40cps. I suspect we’ll see similar for Boresight.”
And, of course, the double feature: 1414 Degrees signed agreements with two Ukrainian entities — the first a government-backed defence manufacturer that builds something like 72,000 drones and UAVs annually and wants to get to 360,000 units within 24 months, McIntyre told Wire listeners on Thursday.
“1414 Degrees used to try and make molten salt energy storage applications; it recently pivoted to defence. Hopefully not a bit too late,” Davidson said.
JD continued: “They’re now hoping to get their batteries put into Ukraine’s kamikaze drones. I think that’s the first big application of Australian drone technology, which is largely offensive, as opposed to defensive.”
“Australia is a really attractive jurisdiction to launch a drone tech company, especially if you’re too small to list on the NASDAQ, in no small part because Australia has one of the most generous R&D rebate programs in the world.
“There is a quip that floats around that Oz is the Israel of the Pacific. In this context of publicly listed drone tech companies, I think that’s extremely true.”
“It’s only got 600 million shares on issue, not terrible, $70 million market cap, a commercial contract with big dollar signs with the Ukrainian army. So far, the only junior to team up with Ukraine’s military,” he concluded.
And McIntyre parted with a prediction: “We’ll be talking about drones for a long time.”
You can listen to the full HotCopper Wire episode below.
You can also find the POD to listen to and download over on Spotify.
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