3D Printing Tech Co. Presents Attractive Buying Opportunity
Research Report

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Disclosures for Bell Potter, AML3D Ltd., August 18, 2025

Research Coverage & Policies For Bell Potter Securities’ Research Coverage Decision Making Process and Research Independence Policy please refer to our company website: https://bellpotter.com.au/research-independence-policy/. Authoring Research Analyst’s Certification The Authoring Research Analyst is responsible for the content of this Research Report, and, certifies that with respect to each security that the Analyst covered in this Report (1) all the views expressed accurately reflect the Analyst’s personal views about those securities and were prepared in an independent manner and (2) no part of the Analyst’s compensation was, is or will be, directly or indirectly, related to specific recommendations or views expressed by that Research Analyst in the Research Report. 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Any person receiving this Research Report from Bell Potter Securities (US) LLC and wishing to transact in any security described herein should do so with Bell Potter Securities (US) LLC. Disclosure: Bell Potter Securities acted as Joint Lead Manager of AL3's $30m capital raising in December 2024 and received fees for that service. Bell Potter Securities owns shares/options in AL3. Bell Potter Securities Limited ABN 25 006 390 772 Level 29, 101 Collins Street Melbourne, Victoria, 3000 Telephone +61 3 9256 8700 www.bellpotter.com.au Bell Potter Securities (HK) Limited Room 1601, 16/F Prosperity Tower, 39 Queens Road Central, Hong Kong, 0000 Telephone +852 3750 8400 Bell Potter Securities (US) LLC Floor 39 444 Madison Avenue, New York NY 10022, U.S.A Telephone +1 917 819 1410 Bell Potter Securities (UK) Limited 16 Berkeley Street London, England W1J 8DZ, United Kingdom Telephone +44 7734 2929

On August 18, 2025, Bell Potter analysts Daniel Laing and Stuart Howe maintained a Buy (Speculative) rating on AML3D Ltd. (AL3:ASX; AMLDF:OTCPK) with an unchanged valuation of AU$0.40, representing 42.9% upside from the current share price of AU$0.28.

The analysts cited the recent share price weakness as providing "an attractive buying opportunity for AL3, ahead of what we expect to be a material uplift in sales over the next two years based on robust demand from the U.S. defense industrial base."

FY25 Financial Results Miss Expectations

AML3D Limited reported fiscal 2025 results that were softer than anticipated and missed Bell Potter's estimates across key metrics. The company recorded revenue of AU$7.4 million, up 1% year-over-year but below the analysts' forecast of AU$8.1 million. EBITDA loss widened to AU$6.5 million compared to Bell Potter's estimate of AU$5.3 million loss, while net loss reached AU$7.4 million versus the analysts' expectation of AU$6.1 million loss.

The company reported diluted earnings per share of negative 1.6 cents and declared no dividend, though none was expected. Operating cash outflow was AU$2.9 million, better than Bell Potter's estimate of AU$3.5 million outflow. AML3D maintained a strong balance sheet with AU$30.4 million in cash and no core bank debt at June 30, 2025.

Contracted Order Backlog Supports Outlook

Despite the disappointing fiscal 2025 result, the analysts believe there is "no cause for alarm considering the AU$9m contracted order backlog points to the lower revenue recognized during the 2H as largely a timing issue." The AU$9 million backlog already exceeds the fiscal 2025 revenue result and accounts for 49% of Bell Potter's fiscal 2026 revenue forecast of AU$18.5 million.

Gross profit increased 10% year-over-year to AU$5.1 million, with gross margin improving to 68.4% from 62.6% in the prior year, though still below the analysts' forecast of 70%. Total expenses increased 61% to AU$12.0 million, which was higher than Bell Potter's estimate of AU$10.9 million and included AU$1.4 million in share-based payment expenses as the company scaled up operations in the United States.

US Defense Market Opportunity

The analysts highlighted accelerating demand from the U.S. defense industrial base, with an expected acceleration of U.S. defense contracts in the second half of calendar year 2025 based on demand forecasts provided to AML3D by the US Navy. The company has established strong relationships with the U.S. Navy and received a Letter of Intent identifying AML3D, "as key contributor to the rapid adoption of AM into the U.S. defense industrial base."

AML3D's Wire Additive Manufacturing technology addresses capacity issues facing the U.S. defense industrial base, which currently lacks the ability to meet production targets. The U.S. Department of Defense has identified additive manufacturing as pivotal to boosting capacity by reducing manufacturing timelines for key components.

Updated Financial Forecasts

Bell Potter made only minor changes to forecasts based on the fiscal 2025 result, with revisions to operating expenses, depreciation and amortization, interest expenses, and cash flows. For fiscal 2026, the analysts project revenue of AU$18.5 million, EBITDA loss of AU$1.7 million, and net loss of AU$2.4 million.

The strong forecast revenue growth is underpinned by the AU$9 million contracted order backlog and expected acceleration in US defense contracts. Looking further ahead, Bell Potter projects fiscal 2027 revenue of AU$32.7 million with EBITDA turning positive at AU$4.2 million, and fiscal 2028 revenue of AU$47.1 million with EBITDA of AU$13.2 million.

Valuation Methodology and Investment Thesis

The analysts' AU$0.40 valuation remains unchanged, representing more than 30% premium to the current share price. The valuation methodology applies equal 50% weightings to discounted cash flow analysis using a 9.5% weighted average cost of capital and enterprise value-to-revenue multiple of 9.0x.

Bell Potter believes "AL3 is at an inflection point, with accelerating demand from the US defence industrial base driving a material increase in system sales over the next 3-years." The company's current valuation does not yet reflect the anticipated jump in sales, with AML3D trading well below comparable additive manufacturing companies.

Technology Advantages and Market Position

AML3D's Wire Additive Manufacturing technology offers key advantages compared to traditional casting and forging methods, being highly adaptable to over 30 feedstocks including aluminum, titanium, copper, and nickel alloys. The analysts noted that compared to traditional methods, "AL3's ARCEMY systems build certifiable metal parts harder, faster, stronger and with a lower carbon footprint."

Risk Factors

Key risks include market resistance to new technology as the company faces the challenge of disrupting established manufacturing practices. The analysts highlighted that "existing investments in traditional methods and the novelty of wire arc additive manufacturing may hinder widespread adoption." Technical risk also remains significant as continuous research and development is crucial for staying competitive and scaling the technology.

With 545.9 million shares outstanding and an enterprise value of AU$122.5 million, AML3D provides leveraged exposure to the growing additive manufacturing market, particularly within the US defense sector where capacity constraints create significant opportunities for disruptive technologies.