Dotz Nano Ltd [ASX:DTZ] shares are up 24% in early trade today. The upswing comes after the company announced it had agreed to a distribution deal in China.
What happened to Dotz Nano share price?
Dotz Nano specialises in making graphene quantum dots (GQDs). These are minute layers of graphene with semiconductor properties. In fact, GQDs are so tiny that they’re referred to as ‘artificial atoms’.
They’re used in a range of technologies, perhaps most noticeably in modern TVs. But that’s just the beginning. GQDs applications could be much farther-reaching, but only time will tell. Nonetheless, today’s deal is a step towards innovation.
Dotz Nano has agreed to provide China Israel Science Technology Innovation Center Ltd (CisticPoly) with these GQDs, which the company will then sell locally in China. The exclusive deal has been valued at US$15 million for Dotz Nano over three years. And that’s just the minimum, so the deal could be worth even more.
What’s next for Dotz Nano?
The deal effectively started on 19 December 2017. Dotz Nano is just waiting on product approval before it expects purchase orders to begin.
However, if the product doesn’t get approval, Dotz Nano will receive nothing. CisticPoly won’t have to buy the GQDs if they can’t get approval in China. However, both companies are confident it won’t be an issue.
In fact, the pair may create their own manufacturing site in China if demand is strong enough — an option that will be explored in 24 months if GQDs prove popular.
There’s no doubt that it’s an exciting time for the technology and Dotz Nano shareholders.
Junior Analyst, Money Morning
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