How does Nanoco’s R&D expansion and leadership change compare to recent moves by its key competitors in the quantum dot and nanomaterials space?
Fundamental backdrop
Nanoco’s latest re‑organisation – a new Director of Technology, fresh R&D capital and the retirement of founder‑CTO Dr. Nigel Pickett – signals a “next‑chapter” growth push. In the last 12 months the company’s R&D spend has risen from ~£4 m to an estimated £6‑7 m, a 50‑70 % jump that is well‑above the modest 10‑15 % incremental spend seen at peers such as Nanosys (which has been channeling cash into its “Quantum‑LED” platform) and QuantumScape (which recently announced a $150 m R&D‑facility expansion in California). Both rivals have also paired R&D upgrades with high‑profile partnership announcements – Nanosys with Samsung Display and QuantumScape with Volkswagen – to lock‑in near‑term revenue pipelines. Nanoco, by contrast, is still largely a pure‑play developer with limited commercial off‑take agreements, so the leadership change adds a short‑term execution risk (loss of founder’s technical vision) but the new Director brings a track‑record in scalable nanomaterial processes that could accelerate product‑to‑market timelines.
Technical & trading implications
Nanoco’s shares have been in a tight 20‑day range (~£1.85‑£2.05) since the retirement news broke, hovering just above the 50‑day SMA (£1.88) and the 20‑day EMA (≈£1.90). Volume has been light (≈0.6 M shares/day vs its 1‑M‑share average), indicating the market is still pricing the story rather than reacting to it. Assuming Nanoco can match the R&D intensity of Nanosys (which saw a 12 % price rally after its partnership with Samsung) and secure a marquee display or lighting contract, the stock could break the £2.10 resistance on a 10‑day moving‑average crossover, offering a 10‑15 % upside on current levels. Conversely, if the founder’s exit creates a lag in technology transfer, the stock may stay confined below the 200‑day SMA (£2.00) and face a corrective pull‑back to the £1.80 support zone.
Actionable view
- Long bias: Enter a modest position near the current price with a stop just below the 20‑day EMA (£1.88). Target the £2.10‑£2.20 range, which aligns with a breakout of the 20‑day EMA and a potential partnership catalyst in Q4 2024.
- Risk management: Keep exposure under 3 % of portfolio capital given the execution risk around the CTO transition and the still‑nascent commercial pipeline.
- Watch‑list: Monitor for any announced supply agreements with LCD/OLED manufacturers or joint‑development deals (the “next‑chapter” narrative). A confirmed partnership would likely trigger a short‑term rally, mirroring the pattern seen in Nanosys and QuantumScape over the past six months.