LON:VRS | Versarien - Part 1 Background To The Graphene Marketplace

27th Jan '18 by MikeBrenner

11 comments 12685 reads

You may ask why there are pages below are not talking just about Versarien and their financials. It’s because it is impossible to understand the graphene opportunity unless you understand the ecosystem that they operate in. There is also a lot of “connecting of dots” which helps to paint the picture of the progress Versarien have made and the opportunities that lie ahead of them.

ADVFN - There are some really good ADVFN posters who are long term investors in VRS, have attended shareholder open days / AGMs and have excellent insights and research that they share especially Superg1, bones, Atoxyl, compounup & severnof9 who have informed a lot of my own research and I have shamelessly copied so of their insights. Obviously, you have to wade through a load of rampers, derampers and nutters that seem to frequent ADVFN but hopefully we can get a decent level of discussion and sharing of insights going on Stockopedia instead.

Finally, it’s a bit nerve wracking doing my first posts on Stockopedia especially with the quality of writers here already – I’m dyslexic and it’s something I struggle so hopefully you find enough quality within the quantity! You can find me @MikeWBrenner where I retweet a lot of my graphene / Versarien research

Due to the size of my research i'm splitting it into 3 posts

Part 1 - A Background to the Graphene Marketplace

Part 2 - A deep dive into Versariens Business

Part 3 - Graphene Competitors

Why Graphene?

It’s a multifunctional material that can be added to other materials to change their properties

It is ultra-light yet immensely tough.
It is 200 times stronger than steel, but it is incredibly flexible.
It is the thinnest material possible as well as being transparent.
It is a superb conductor and can act as a perfect barrier - not even helium can pass through it.
In its graphene oxide form it is the worlds finest membrane – you can remove salts from water to create drinking water

What applications for graphene?

Some video’s on its background and uses:

Graphene: Made in Manchester - https://www.youtube.com/watch?v=ZMJnBx117-E
What is Graphene - https://www.youtube.com/watch?v=0fbQX5VJmew
Energy - https://www.youtube.com/watch?v=DzLiaJsric4
Composite Materials - https://www.youtube.com/watch?v=LTa_ileMJxE
Membranes -

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markles

28th Jan '18

Fantastic posts Piecesof8 - will spend the next few days digesting the wealth of information you have provided. This is a share I bought a few of back in early November based on its intriguing story, not something I would normally do, but this was a story share like no other I had come across in my short investing career. Top sliced on the first big up but have been topping up on the small dips since then. They say not to get to attached to shares but this company and its CEO are something quite exceptional so now I intend to stay long. Again thank you for all the detail.

Lawrence Ang

Brilliant post Mike. You done an incredible job putting it all together. Top man.

Owenga

A fantastic job pulling all this information together in one place. I was already aware of a lot of it, but reading it all, brings it all together to give a clear understanding. A must read for all new potential investors.

Ken Halstead

Great write up, and very well researched.

Well done Mike.

Axotyl

Really superb, Mike, and appearing at a seriously exciting stage for VRS investors; the first of many, I'm sure.

runthejoules

I've been in Versarien (LON:VRS) since sub-19p and it's saved my portfolio. I think the potential is massive and I'm ready to put up with - or try to trade - the inevitable swings given the inevitable FOMO followed by short attacks. These blogs are a great way of introducing VRS to new investors, and if they don't buy, they'll have learnt a lot about graphene too. However, I would like to hear more of the bear case here on Stocko - the Weaknesses and Threats to graphene itself. The environmental impact, for one. The world seems to be moving away from producing plastic things that will destroy the planet as they break down - what will putting graphene in them do for future disposal or recycling? I don't personally feel like I know enough about that and I don't think it's something Versarien are heading off - on their website or research - anything like enough. Certainly, investors who can see graphene being put into *everything* don't seem to reckon with the shift in perception that actually, we should probably be packaging and producing things in materials that *aren't* meant to last - bioplastics, etc. Still hitting 'bullish' though.

davidbowler

19th Jun '18

Excellent summary

Zoiberg

22nd Apr '19

Excellent and much needed. Graphene has been on my back burner for some time ever since I read about researchers who used it to detect a spider's foot fall (only arachnophobes will understand). I was however put off by the amount of research required. Thanks again, I will be reading with interest over the coming days.

JakNife

Stockopedia has Versarien labelled as a "momentum trap", ie a company where the share price has risen dramatically but there are no supporting value or quality metrics. The market cap of VRS is £200m. For £200m you could buy all of VRS, or you could buy:

Five Billingtons: https://www.stockopedia.com/sh...

Inland Home and have £80m left over: https://www.stockopedia.com/sh...

James Latham and have £40m left over: https://www.stockopedia.com/sh...

These are three example companies that have momentum AND other quality or value characteristics.

On the other hand, Versarien has momentum with no particular quality/value characteristics. It promises lots in the future; however, it's delivered not very much in the past. For example, its graphene revenues in the year to March 2018 were a rounding error, estimated at under £24k. In the prior year VRS's graphene sales were estimated at £128k. So it's not a "growth" company, because graphene sales have been falling. And it's not "value" either, eg in the year to March 2018 it burnt £1.97m of cash in operations and in the first six months of the current year it burnt £843k.

Perhaps 2 or 3 times sales might be a reasonable price to pay for VRS? That would imply a value of say £20 or £30m. Net book value is £12.3m so perhaps the reasonable price should be lower?

Versarien first got into the graphene space five years ago in April 2014 when it acquired 2-DTech Limited from The University of Manchester for £440k. Paying £200m to buy VRS today implies paying a big chunk for the promises of what might be delivered in the future even though those promises have been around for five years now but nothing tangible has been delivered yet.

And if you wouldn't pay £200m to buy all of VRS then why would pay 131p to buy just one of its shares?

carmensfella

Just to mention that Neill Ricketts the Versarien CEO has accepted an invitation from Mello to appear on a specialist panel at Mello2019 in London on Friday 17th May which will be looking at the reasons why stocks fluctuate wildly on valuation grounds and rarely valued correctly so do not seem to be the right price?

The panel will engage in serious discussion over a one hour session and include a well known City analyst, a broker, a financial PR, a highly respected investor and a fund manager. Two other stocks will be discussed and the CEO or board member from each company analysed is taking part.

This will not be a light hearted session as the aim is to understand why certain stocks fluctuate wildly in price or never get anywhere near what a reasonable valuation should be if the brokers have their research correct ? It should be useful and informative. Mello is an event created by investors, run by investors and most certainly for investors. It is a ticket only event.

If you would like to come and meet and speak with Neill at the event and watch this panel session it will take place in the early afternoon at Mello2019 held in Chiswick, London W4 and further details here

Https://melloevents.com/upcoming-event/

If you want discounted tickets to attend then the best code to use is Stocko40 and you will get 40% off the one or two day prices.

David

Camtab

11th Aug '19

VRS and Graphene are subjects that have bemused me for a while now and this is a very useful page Mike. Thankyou for taking the time to do it. My concerns are around valuation which currently does assume a lot of success. That said I can easily see expectations being met given rumoured transactions with the Chinese and Aecom plus textiles and other industries which have started work on this. VRS seem to have gone some way to defining graphene which is undoubtedly helpful. In the end though many a slip between cup and lip and £200m is a big ask at such an early stage. I hold because I don't want to miss out, the old fear and greed issues abound!

Versarien - Part 1 Background to the Graphene Marketplace

Why Graphene?

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MikeBrenner

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