DGI PLC - Initiation of Coverage

Novel motor and energy storage business set to benefit from huge growth in demand for emissions reducing technologies

Path Investments has completed the reverse takeover of DG Innovate Limited (now renamed “DGI PLC”), an advanced research and development company focusing on novel electric motor technologies and energy storage solutions. Working with a range of partners, including major transport and energy companies, research bodies and the UK government, DGI PLC is currently moving to the commercialisation stage of its development, developing products with applications across a range of end uses.

  • £4.6 million raised to advance towards first significant product sales

    DGI PLC will now be focused on the development and commercialisation of its technologies. Its strategy is to evolve from being an R&D business into a Tier 2 supplier and/or technology licensor to the electric mobility and energy storage industries. To fund this, £4.6 million has been raised via a share subscription and warrant exercises.

  • Enhanced Drive Technology - EDT

    DGI PLC is developing multi-platform, ultra-high efficiency, compact, cost-effective electric motors and electronics which have applications across a range of markets. The company has focused on developing electric drive systems which aim to deliver improved performance and range over existing technology by reducing energy losses and improving efficiency. Simulations have shown these can increase the range of a leading passenger EV by up to 25%, from the same battery pack.

  • Enhanced Battery Technology - EBT

    DGI PLC is developing fully-recyclable, sodium-ion (Na-ion) batteries using anode active materials as a key enabling technology. The intention is to offer comparable or greater energy density to incumbent battery technologies (such as lithium and lead based) at a lower cost and with reduced environmental impact. A pilot scale pouch cell production line was recently built and will allow the manufacture of A5 size cells for testing.

  • DCF analysis shows significant upside if product sales ramp-up as planned

    Our DCF analysis shows that DGI PLC’s business model looks to be potentially highly profitable. We see a significant scale up in product sales from 2025, with EBITDA margins in the mid-40 per cent level leading to strong cash flow. Discounting at a rate of 20% we derive a value to equity holders of £156.43 million. We initiate coverage of DGI PLC with a target price of 1.192p and a stance of Conviction Buy.

  • RISK WARNING & DISCLAIMER

    DGI is a research client of Align Research. Align Research holds an interest in the shares of DGI. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/ 

    For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

Table: financial overview
Year to Dec 2022E 2023E 2024E 2025E
Revenues (£m) 0.29 1.99 13.22 80.97
Net profit (£m) (2.49) (2.26) 1.53 27.37
Source: Align Research

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