If you have a high tolerance for risk, then Bell Potter thinks it could be worth taking a look at 6K Additive Inc (ASX: 6KA) shares.
In fact, the broker believes that this exciting ASX stock could rise materially from current levels.
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What is the broker saying?
6K Additive is a newly listed US-based manufacturer, upcycling metal scrap into premium metal powders and alloying additives.
Its patented UniMelt technology can produce spherical powders for Additive Manufacturing (AM) across a range of high-end reactive metals, refractory metals, and alloys. This includes titanium, Inconel, C103, and tantalum.
Bell Potter notes that compared with incumbent spheroidisation processes, UniMelt has materially lower energy consumption. It also achieves higher product yield and upcycles manufacturing waste.
Key demand sources are the aerospace, defence, energy and medical sectors, with AM Research estimating the global AM powder market to grow by an average of 19% each year to around US$4.6 billion by 2033.
Bell Potter believes that this leaves the ASX stock well-positioned to be generating EBITDA of approximately US$36 million by 2028. It said:
Metal powders represent around 65% of current revenues from installed capacity of 290tpa. 6KA are expanding powder capacity to 1,340tpa over 2026-27, as part of a US$31m capital program. Funding includes a US$23m US Department of War Defence Production Act grant, the proceeds from its recent A$48m (US$32m) ASX IPO and a US$27m US EXIM Bank loan. By 2028, we estimate 6KA's annual EBITDA run-rate at around US$36m.
ASX stock tipped to rocket
According to the note, Bell Potter has initiated coverage on the ASX stock with a speculative buy rating and $1.45 price target. Based on its current share price of 81 cents, this implies potential upside of almost 80% for investors over the next 12 months.
To put that into context, a $1,000 investment would be worth approximately $1,800 by this time next year if Bell Potter is on the money with its recommendation.
Though, with a speculative buy rating, investors need to be aware that they could just as easily make a loss on investment.
Commenting on its initiation, the broker said:
6KA has a competitive advantage in the production of high-value metal powders for the fast-growing global Additive Manufacturing sector. The company's UniMelt systems are energy efficient, high yield and accept recycled metal feedstock. 6KA is supporting US-based reshoring of critical metal supply.
Company value is highly leveraged to the take-up of Additive Manufacturing, which has lead-time advantages over incumbent casting and forging production methods. We expect Additive Manufacturing to be a beneficiary of the US Department of War's Acquisition Transformation Strategy to support rebuilding the country's Defense Industrial Base.
