In an uncertain market investors turn to what is tried, tested and true. Technology is undoubtedly a sector that is here forever, and major advancements are setting the tone for a new revolutionary era – Investor sentiment is through the roof in this sector.
Fiber Optics, Lasers, quantum computing, Imaging, Data Storage, Data transfer, Data visualization such as 3D, Terahertz wireless communication, to name a few, are fast growing technologies enabled by the science of Photonics, shaping almost every major industry and creating new ones.
Our research and due diligence indicates the following company: Zecotek Photonics Inc. (OTC: ZMSPF / TSX.V: ZMS), a junior photonics tech firm, with over 50 patents and patent-pending technologies, that is central to world-changing industries including key enabling components for Nuclear Medicine (Proton therapy, high resolution PET/MRI scanners), High Energy Physics Research (IHEP, the World largest particle accelerator based in China and CERN), Unique HD super-realistic glasses free 3D monitors for new generation laptops and tablets, new wireless duplex (one frequency) ASIC chip for high traffic data control, such as autonomous vehicles, Block chain/crypto-finance, large scale manufacture, medical/scientific /industrial data acquisition and control.
According to a report by Research and Markets, the photonics market is projected to grow from $530.52 billion in 2017 to $795.54 billion in 2022, at a CAGR of 8.4% during the forecast period.
Big breakthroughs are happening across the entire photonics sector, and within the surge the sector has created and sustained several multi-billion-dollar companies, including ASML Holding N.V. (NASDAQ: ASML), Coherent, Inc. (NASDAQ: COHR) and IPG Photonics Corporation (NASDAQ: IPGP).
Overall, optics and laser companies had a record-breaking year in 2017—with spending on equipment in the sector surpassing an annual mark that has stood since 2000.
So for investors looking for a strategy that could evolve with the technological boom in the photonics sector for big gains—we believe it’s wise to find companies with several patents, and high-profile clients.
Many of the top photonics developers are well beyond the breakout phase—But we specifically believe Zecotek is poised for a big 2018 of its own.
Zecotek’s LFS scintillation crystals and MAPD Silicon Photo-Multipliers are being used inside the equipment of major world-changing research, including the world’s first total body PET scanner, and Neurological PET scanner, and IHEP (World Largest Particle Accelerator Program) as well as CERN’s CMS experiment that aids in finding dark matter, other dimensions, and possibly better understanding of the mechanisms of the origins of existence itself.
The Entire Photonics Sector is Expected to Go UP — Up 50% by 2022
The Global Photonics Market is expected to grow from its current $530.52 billion mark to $795.54 billion by 2022, at a CAGR of 8.4% from 2017 to 2022.
As far as end-use industries go, photonics gained the largest of its market share from the media, broadcasting & telecommunication segment. Photonics are used in this segment for communication, data storage, and data sharing purposes, in particular by significantly increasing the speed of internet and quality of voice calling.
However, specialty applications offer investors a way to the front of the line—especially with the breakthroughs that are taking place today.
Photonics Developers on a GREAT RUN — Average 260% Gains Over Last 2 Years
Through our research across the photonics space, there are three standouts whose prices increased by an average 260%+ since delivering major advances in their respective fields, and one particular company caught our eye (Zecotek Photonics) that has a standout portfolio, and is coming out on the world stage in multiple major projects.
However, it has yet to be justly rewarded by the market. We believe that the stock should be an easy double or triple, at minimum.
After we sampled a group of the photonics majors, we spotted a two-year trend—Each of these companies have consistently made technological breakthroughs, and saw massive gains as they surpassed billion-dollar market caps:
- ASML Holding N.V. – 130% gain since it partnered with NCS in 2016 to streamline process flow from design to mask production.
- Coherent, Inc. – 427% gain since developing a new laser line generator for high-precision machine vision applications in January of 2016.
- IPG Photonics Corporation – 223% gain since February of 2016, but started to truly take off in February 2017, when its revenue grew 25% in one quarter, which led to a series of strategic acquisitions in the summer.
Across all three, that’s an average gain of nearly 260% over the last two years—and these were already majors! Higher returns for juniors is a typical trend across most sectors.
Therefore, we applied what we witnessed from these three major photonics companies, and applied it to junior Zecotek, prior to what we believe will be its big breakout.
Zecotek’s Crystals— Integral to the World’s First Total-Body PET Scanner, and Finding Cures
Armed with over 560,000 detector elements, the UC Davis-based EXPLORER scanner is aiming to make a very bold step forward in the field of clinical diagnostics.
Like something out of Star Trek, the EXPLORER can view all organs of the body simultaneously, with a 40-fold increase in effective signal over current technology.
Positron emission tomography (PET) is widely considered the most sensitive technique available to safely study metabolism, physiology, and molecular pathways in the living human being.
Total-body PET has the potential to completely revolutionize clinical diagnostics, and the understanding and treatment of disease through analysis of better imaging data from the whole body.
“A system with this detection sensitivity will dramatically improve our ability to study cancer and other diseases as well as advance diagnostic capabilities in our industry,” said lead researcher Simon Cherry, Head of Cherry Labs, and professor in the UC Davis Department of Biomedical Engineering.
Zecotek already has three key patent-protected and proprietary technologies with the potential to revolutionize the $15 billion medical diagnostics industry:
- LFS Scintillation Crystals,
- Solid-State MAPD Photo Detectors and Transistors,
- Integrated Detector Modules (IDM)
Used within the EXPLORER scanner, are Zecotek’s proprietary LFS scintillation crystals, known for their quality and effectiveness in their application.
“Zecotek provided Cherry labs with a selection of scintillation crystals from their patented LFS-3 range. After preliminary testing Cherry labs found the crystals to have the fast decay constant they required, enhancing results for their depth-encoded PET detector designs,” said Simon Cherry of UC Davis.
“This combined with the competitive pricing Zecotek is able to offer made for an ideal solution.”
Official delivery of the prototype EXPLORER scanner is expected in 2018.
Should the prototype meet and surpass its technological goals, scanners of this magnitude could very quickly be purchased and installed in other hospitals and university research facilities around the world.
The EXPLORER technology fits within the growing Biophotonics Market which is projected to grow at a CAGR of 11.5% through 2020 to $50.18 billion.
On top of the UC Davis order, Zecotek secured an order worth $1.2 million for their patented LFS scintillation crystals with EBO optoelectronics.
Zecotek Crystals Detecting in Possibly the Most IMPORTANT Research in the Universe
While Zecotek’s role in the development of the world’s first total-body PET scanner, it’s their role in the search for the origin-mechanics of the universe that could be even larger a contribution to humankind… and beyond.
Just over five years ago, through the Large Hadron Collider (LHC), scientists at CERN reported that they observed a particle “consistent with the long-sought Higgs boson.”
But that wasn’t even close to the end goal of the project—the LHC is just getting started.
Zecotek’s LFS crystals (also used in the EXPLORER) have found a home in CERN’s Compact Muon Solenoid (CMS) experiment.
The CMS experiment is one of the largest international scientific collaborations in history.
By 2014, the CMS experiment had involved 4300 particles physicists, engineers, technicians, students, and support staff, from 42 countries.
With such important research taking place, it’s a major vote of confidence for Zecotek to have their LFS crystals involved in the world’s most precise particle detection.
“Zecotek provides LFS crystals required for the CMS experiment as they had the necessary energy resolution and radiation hardness,” says Professor Brad Cox, Leader of the University of Virginia, CERN’s Compact Muon Solenoid experiment, led by the University of Virginia.
“In using the thin LFS crystal plates [our] team were able to reduce the technical and cost risks associated with measurements in such experiments.”
The Zecotek LFS crystal is quickly being recognized as a world-class photonics technology—However, it’s just one of Zecotek’s 50+ patented, and patent-pending technologies.
Zecotek 3D Displays and 3D Printing
While the high-profile uses of Zecotek’s LFS crystals are involved in some of the world’s most major research breakthroughs, it’s with the photonics developer’s other technologies that you’ll be more likely to encounter in your day-to-day lives.
Among the most fascinating of Zecotek’s developments, is the company’s patented 3D display technology.
Zecotek is at the vanguard of a new generation of glasses-free 3D displays—with a patented data processing module that provides for real-time capability, with a system capable of transferring data for up to ninety views in full high definition.
By eliminating the need for accessory light modulator package (ALP) boards, Zecotek’s tech allows for significantly cheaper, more compact and commercially-viable 3D displays.
The result has been major interest from automakers. This started with a deal in July to develop a brand specific 3D head-up display (HUD) and entertainment console for one of Germany’s leading automobile manufacturers.
That led to a second automaker signing with Zecotek in November.
“We have signed the necessary documentation with yet another leading European auto manufacturer to openly discuss the details of integration of our 3D display technology into its high-end luxury cars,” says Dr. A.F. Zerrouk, Chairman, President and CEO of Zecotek Photonics Inc.
“Our 3D display platform offers each manufacturing partner the ability to design, build and install their own unique, content rich HUD unit. In such a very competitive landscape, we are pleased that our patented 3D technology has attracted two world-class automakers. We are currently working with both manufacturers and expect to deliver the first 3D-HD-HUD display systems in the second half of 2018.”
In 2015, the automotive HUD industry was worth approximately $411.6 million with over 1.2 million units sold. That same market is projected to grow at a CAGR of roughly 21.68% through 2020 to a value of over $1.3 billion, with German automakers taking on the largest amount of adoption in integrating HUD products.
But ultimately that is not the end of the 3D impacts that Zecotek are making.
Zecotek is developing a compact, high-speed 3D printer, which will use high-performance metal alloys and offers technical and commercial advantages over competing technologies—much like Zecotek does with its LFS crystals.
The new 3D printer is targeted for prototyping and distributed manufacturing with specific applications in electronics, aerospace, automotive, mechanical, and healthcare industries.
In just the healthcare market alone, the Global 3D Printing segment was valued at $579 million in 2014—but according to Allied Market Research, that market is expected to garner $2.36 billion by 2020, registering a CAGR of 26.2% during the forecast period of 2015-2020.
The growth in the 3D printing sector of healthcare will likely give rise to more personalized care, pre-surgical planning, and pre-clinical drug testing.
In the aerospace industry, 3D printing is expected to grow from $714.5 million in 2017 to $3.057 billion by 2022 at a CAGR of 27.42%.
And in the automotive market, 3D printing will be worth $1.56 billion by 2020, growing at a CAGR of 26.58%.
The growth rate of the 3D printing market is quite large, and the applications of the technology are being welcomed by engineers everywhere.
We believe that Zecotek will have a very large role in a handful of prominent sectors in the years to come, as it has quietly developed and acquired a very valuable portfolio of assets—and it has only just began to truly sign in on large partnerships.
FEATURE STOCK: FOR COMPARISON
Zecotek Photonics Inc
Market Cap: $32.503 million
Zecotek Photonics Inc., is a junior photonics technology company, founded in 2004, which develops various photonics technologies and products for commercial and research applications in medical, bio-science, high-energy physics, pharmaceutical research, material processing, engineering and industrial design, and multi-media markets.
Photonic Comparable Companies: Further Along with Multi-Billion Caps, But Worth Studying
These stocks represent some of the leading players in the photonics sector, all of which have experienced major gains over the past two years. We believe they show a clear picture of the rapid growth in the sector going forward.
ASML Holding N.V.
Market Cap: $78.492 billion
Founded in 1974, ASML develops, produces, markets, sells, and services advanced semiconductor equipment systems with a focus on lithography related systems.
Market Cap: $7.34 billion
Founded in 1966, Coherent provides lasers and laser-based technology in a range of scientific, commercial, and industrial applications worldwide, through two segments, Specialty Lasers and Systems, and Commercial Lasers and Components.
Recent Headline: New Ultrafast Laser Streamlines MPE Microscopy
IPG Photonics Corporation
Market Cap: $12.993 billion
Founded in 1990, IPG Photonics develops and manufactures a range of high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications, primarily in materials processing worldwide.
Recent Headline: IPG Photonics Announces Acquisition of Laser Depth Dynamics
Our Recommendation: Zecotek Photonics Gets Our Strongest BUY Rating
With 50+ patents and patent-pending technologies, including some already being used in prominent world-changing research, Zecotek Photonics has all the tools for a breakout.
We believe that Zecotek is very well positioned across multiple sectors involving photonics, each with massive potential, and very large CAGR to look forward in the years to come.
With a much larger version of the LHC on deck to be constructed in years to come, there’s a possibility that Zecotek could be involved yet again, given the vote of confidence its LFS crystals received from CERN’s researchers.
But perhaps even larger in terms of buyers is the healthcare community, that eagerly awaits the deployment of UC Davis’s EXPLORER total-body PET scanner.
Given the respect that Zecotek’s LFS crystals have gotten from both CERN and the developers of EXPLORER, it’s safe to hypothesize that Zecotek’s products will be involved with the next generation of PET scanners around the world.
However, as prominent as the LFS crystal use is set to be inside research technologies, from a quantitative aspect, perhaps the biggest potential for Zecotek will be in automobiles.
Securing not one, but TWO brand-exclusive deals with German automakers for Zecotek’s 3D HUD units, is quite significant—We expect these types of units to be in more and more cars in the years to come.
When we put it all together, here’s what stands out for us for ZMSPF/ZMS.V:
- LFS Crystals being used in the Large Hadron Collider (LHC) by CERN, for detection of particles in some of the world’s most important research
- LFS Crystals prominently used in the EXPLORER, the world’s first total-body PET scanner, which could lead to major breakthroughs in diagnostic research
- Signed a deal with two major German automakers for 3D heads-up displays (HUD), in a market expected to grow at CAGR of over 21% to a value of over $1.3 billion by 2022
- Developing a compact, high-speed 3D printer designed with specific applications in electronics, aerospace, automotive, mechanical, and healthcare industries
- Healthcare 3D printing to be worth $2.36 billion by 2020
- Aerospace 3D printing to be worth $3.057 billion by 2022
- Automotive 3D printing to be worth $1.56 billion by 2020
Zecotek has strategically compiled a very respectable portfolio, with significantly increased sales of their products to come in 2018. Buyers of Zecotek’s products are very pleased with their advantages in economics and quality.
We like their targeting of very important photonics components in much bigger scale projects.
Our recommendation is to seek a position now, before they start to see their revenues climb like those of the comparables we’ve listed. We especially like their deals with German automakers for HUD units, as they could likely become the company’s flagship business.
Be sure to stay up to date with Zecotek’s news and advances, as they’ll certainly have a steady news flow stemming from many of their 50+ projects and properties. Join their email list at http://zecotek.com/.
We believe Zecotek is destined for very big things in 2018, with an enviable portfolio and a glowing reputation among their buyers. This is the NEXT BIG PHOTONICS STOCK TO OWN.
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