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					                                                                       Quickstep Holdings Ltd (QHL)
                                                                       July 2009 Update - Recent Announcements Positive

                                                                       Recommendation: Speculative Buy - Target 40c

13th July 2009                                                         1.0 QUICKSTEP SIGNED EXCLUSIVE ANTENNA TEAMING AGREEMENT
    50                Share Price ($)                                      WITH BAE SYSTEMS (12/06/2009)
    40
                                                                       •   QHL has formally teamed with BAE Systems to design & manufacture
                                                                           unique, lightweight deployable composite SATCOM antennas for military and
    30                                                                     commercial applications.
                                                                       •   Quickstep confirms agreement will open the process to the paid manufacture
    20
                                                                           of a demonstration composite antenna at Quickstep’s North Coogee
    10                                                                     headquarters in Western Australia.
                                                                       •   BAE Systems Australia Limited, which is Australia’s largest defence
     0
                                                                           company, is a subsidiary of the global defence and aerospace company.
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                                                                           BAE Systems is also a principal sub-contractor to Lockheed Martin on the
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                                                                           JSF F-35 programme. BAE brings military aircraft expertise that is critical to
Investment Data
                                                                           the F-35 Lightning II airframe and systems.
Share Price                                                      20
Ord Shares (m)                                            162.4        2.0 F-35 JSF POTENTIAL INVOLVEMENT FOR QUICKSTEP
Market Cap                                                  32.5       •   Press articles have suggested that QHL may now be the only man standing
Options (m) (25-26c)                                        20.3           in the quest for local involvement in the $US40 billion JSF contract, which is
                                                                           intended to be the world’s largest ever defence contract.
Enterprise Value                                            36.6
                                                                       •   Media Reports indicate that Lockheed Martin recently sent executives out to
Net Cash (Mar 2009)                                              5.4
                                                                           Australia from its headquarters in Texas, in a last ditch attempt to find
Avg Daily Volume (last mth)                            335.9k              Australian firms willing and able to manufacture composite skins and other
52 Week Low/High (cents)                           12.5 / 37.5             parts for the F-35 Joint Strike Fighter program. We suspect discussions with
                                                                           QHL are ongoing. (The Advertiser - 06/07/2009)
Directors & Officers                                                   •   The reports indicate that the only other two local composite producers -
                                                                           Hawker De Havilland & Australian Aerospace (EADS Australia) - do not have
Mark Bernard Jenkins (Chairman)
                                                                           spare autoclave capacity to produce parts for the program. This leaves
Philippe Odouard (CEO & Managing Director)                                 Quickstep as the sole AS9100 accredited manufacturer available to
Dale Edwin Brosius (Executive Director)                                    participate (in Australia). (The Advertiser - 06/07/2009)
Deryck Graham (Non Exec Director)                                      •   Lockheed’s principal subcontractors on the F-35 are Los Angeles-based
Peter Chapman Cook (Non Exec Director)
                                                                           Northrop Grumman Corp. and London-based BAE Systems Plc.
                                                                           Link: http://www.news.com.au/adelaidenow/story/0,22606,25737444-5006301,00.html
Major Shareholders                                               %
                                                                       3.0 AWARDED AS9100 AEROSPACE CERTIFICATION (15/06/2009)
Decta Holdings                                         23.7%
State One Capital Group                                   7.3%
                                                                       •   Official accreditation to international AS9100/ISO9001:2000 aerospace
                                                                           quality standard marks major milestone for Quickstep. Most of the major
                                                                           aircraft engine manufacturers, such as Airbus, General Electric’s Aircraft
                                                                           Engine Division (GEAE), Boeing, Rolls-Royce Allison and Pratt & Whitney,
                                                                           require their suppliers to be certified to AS9100.
State One Stockbroking Ltd                                             •   Quickstep now meets Quality Standards required to contract to major OEM’s
Head Office                                                                and Tier One manufacturers in the aerospace and defence industries.
Level 14, State One House                                              •   AS9100 encompasses a single business-wide Quality Management System
                                                                           that meets stringent international aerospace standards.
172 St George's Terrace
                                                                       •   Quickstep Technologies is among a select group of only 25 companies in
Perth WA 6000                                                              Australia to achieve AS9100.
Perth Tel: (+61 8) 9288 3388
Sydney Tel: (+61 2) 9024 9105                                          4.0 QUICKSTEP SECURES CLIMATE READY GRANT FOR FUEL EFFICIENT
                                                                           TRANSPORTS – Lends credibility to unique process RST (18/06/2009)
Email: broker@stateone.com.au
Web: www.stateone.com.au
                                                                       •   $2.6M grant has been awarded to QHL under the AusIndustry Climate
                                                                           Ready Program – provided over a 3 year period. This combined with tax
Analyst                                                                    rebates could see up to 80% of the $5.2 million project being supported by
Alexander Beer                                                             the Federal Government
Tel: (+618) 9288 3340                                                  •   RST is a key composite technology with mass production applications, which
Email: abeer@stateone.com.au                                               could deliver the A Class finish necessary in the motor car industry
                                                                       •   Technology provides substantial contribution to CO2 reduction as weight
                                                                           reduction could be as high as 70% on steel vehicles leading to 55% CO2
                                                                           reduction.




                                 This information must be read in conjunction with the disclaimer at the end of this document
RST is focused on reducing part costs and manufacturing times by the semi and full automation of composite component
production and the reduction of material and labour costs. RST is a process whereby hot resin is sprayed directly onto a chilled
mould that “freezes” the resin in place so that it cannot wet the laminate until the part is ready for cure. The next step is to place
a dry fibre pre-pack onto the tool that is covered with the chilled resin.

4.1 RESIN SPRAY TRANSMISSION (RST)

The Quickstep RST curing process commences by heating and melting the frozen resin thus wetting out the pre-pack as the
resin melts on the mould face. Finally, the Quickstep curing process compacts, forms and cures the part in the mould. This
technology is expected to radically lower the costs for the material and labour components in a manufactured composite part.
    •    Tool is sprayed with molten resin, which instantly “freezes” to tool face.
    •    Pre-manufactured dry pack is placed on tool. Vacuum bag is applied.
    •    Prepared tool is put into heated Quickstep pressure chambers and then cured.




                                                    (Source Company - QHL)

5.0 QUICKSTEP SIGNS MoU WITH MALAYSIA’S CTRM FOR OUT-OF-AUTOCLAVE COMPOSITE PRODUCTION
(08/07/2009)
                                                                               th
MoU signed with Composites Technology Research Malaysia (CTRM), the 5 largest composites supplier to Airbus:
   •    CTRM to evaluate Quickstep’s Out-of-Autoclave Process to enhance its composite manufacturing operations based in
        Malacca, Malaysia.
   •    Both parties aiming to achieve quick and efficient qualification of parts from Airbus for the new generation A350
        aircraft.
   •    CTRM agrees to introduce Quickstep technology to Airbus and other aircraft manufacturers as a viable capability.

As the fifth largest supplier of composite parts to Airbus worldwide, CTRM brings aerospace industry know-how and commercial
connections to assist in facilitating the certification of flying composite parts.

CTRM employs over 1,200 people and is currently expanding its manufacturing facilities to service an order book which stands
at RM2.8 billion (A$1 billion). One of its major customers is Spirit AeroSystems, the largest independent supplier of aero
structures and systems in the commercial aviation market. Spirit AeroSystems (Europe) Limited has recently decided to open up
a new facility in Malaysia.

6.0 QUARTERLY REPORT (31/03/2009)
                                                                                        st
    •    Strong cash position with loan facilities available $12.7m ($2.7m used at 31 March 2009) not including $2.6m grant
    •    Quickstep has replied to a number of Requests for Quotes (RFQ’s) to manufacture advanced composite aerospace
         components out of its North Coogee facility just south of Fremantle and should benefit from a lower exchange rate of
         the AUD. Quotes include: Aerospace OEM (Original Equipment Manufacturer) contract for a 5 year plus period on
         primary and secondary parts, Tier One aerospace supplier subcontract for cabin parts.
    •    In addition to commercial aviation RFQ’s Quickstep is actively pursuing long term aerospace defence contracts and is
         working closely with Australia’s Defence Materials Organisation (DMO) to secure these.
    •    Quickstep has installed two 8 x 3 metre (26 ft. x 10ft. dia.) and one 5 x 2.5 metre (16 ft x 8ft dia.) autoclaves, along with
         a Breton milling machine which is one of the most precise 5-Axis milling machines in Australia. Quickstep’s Breton 5-
         axis machine can mill very large aerospace parts and is the only one of its kind in Western Australia. The company’s
         clean room will be expanded, and capabilities in automated ply cutting, non-destructive part testing and laser
         verification of part dimensions will complement the major pieces of manufacturing equipment.

Page 2 of 3                                                                                  STATE ONE STOCKBROKING LTD AFSL 247100
                        This information must be read in conjunction with the disclaimer at the end of this document
Quarterly Cashflow ($) ('000)                              4th Qtr 2008          1st Qtr 2009           2nd Qtr 2009           3rd Qtr 2009
Cash Beginning                                                  12,798                10,307                   8,858                  4,647
Receipts from Customers                                              93                    82                     78                     76
Payments for:
Staff Costs                                                -         697          -        810           -      1,164           -        696
Advertising & Marketing                                    -         171          -        140           -        215           -        194
Research & Development                                     -         157          -        181           -        167           -        145
Leased Assets                                              -           2          -          2           -          3           -          2
Other Working Capital                                      -         668          -        567           -        618           -        617

Interest Received                                                    225                   200                     126                    37
Income Taxes Received - R&D                                           89                   420                       -                   371

Net Operating Cashflow                                     -       1,288          -        998           -      1,964           -      1,170
Net Investing Cashflow                                     -       1,202          -        659           -      2,499           -        726
Net Financing Cashflow                                                                                                                 2,698
Effects of Exchange Rate                                                                                          252           -          2
Cash Ending ($) ('000)                                           10,308                  8,650                  4,647                 5,447 *

     * Excludes $2.6m Aus Federal Government Climate Ready Grant & $10m convertible loan facility from Al-Farida.

THE STATE ONE CLIENT ADVISORY TEAM
    Graeme Johnson                      George de san Miguel               Brett Walker                       Charles Thomas
    Equities & Derivatives Advisor      Equities Advisor                   Equities Advisor                   Equities & Derivatives Advisor
    Phone: +61 8 9288 3316              Phone: +61 8 9288 3334             Phone: +61 8 9288 3337             Phone: +61 8 9288 3308
    gjohnson@stateone.com.au            gmiguel@stateone.com.au            bwalker@stateone.com.au            cthomas@stateone.com.au
    Martin Jones                        Jason Fung                         Eugene Loy                         Peter Wong
    Equities Advisor                    Equities Advisor                   Equities & Derivatives Advisor     Equities Advisor
    Phone: +61 8 9288 3326              Phone: +61 8 9288 3328             Phone: +61 2 9024 9109             Phone: +61 8 9288 3330
    mjones@stateone.com.au              jfung@stateone.com.au              eloy@stateone.com.au               pwong@stateone.com.au
    Phillip Wan                         Ryan Davis                         Ric Heydon                         John Rawicki
    Equities Advisor                    Equities & Derivatives Advisor     Equities & Derivatives Advisor     Equities & Derivatives Advisor
    Phone: +61 2 9024 9128              Phone: +61 2 9024 9106             Phone: +61 8 9288 3307             Phone: +61 2 9024 9105
    pwan@stateone.com.au                rdavis@stateone.com.au             rheydon@stateone.com.au            jrawicki@stateone.com.au
    Sam Berridge                        Alexander Beer                     Peter Kopetz
    Resources Analyst                   Analyst                            Industry Analyst
    Phone: +61 2 9288 3302              Phone: +61 2 9288 3340             Phone: +61 2 9288 3347
    sberridge@stateone.com.au           abeer@stateone.com.au              pkopetz@stateone.com.au
    Alan Hill                           Karen Tan                          Matthew Drew
    Executive Chairman                  Dealers Assistant                  Dealers Assistant
    Phone: +61 8 9288 3388              Phone: +61 8 9288 3303             Phone: +61 8 9288 3341
    ahill@stateone.com.au               ktan@stateone.com.au               mdrew@stateone.com.au


General Advice Warning
The contents of this document have been prepared without taking account of your objectives, financial situation or needs. You should, before
taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information
mentioned in this document, consult your own investment advisor to consider whether that is appropriate having regard to your own
objectives, financial situation and needs.

 Whilst State One Stockbroking Ltd believes information contained in this document is based on information which is believed to be reliable,
its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any
loss or damage arising in any way for any representation, act or omission is accepted by State One Stockbroking Ltd or any officer, agent or
employee of State One Stockbroking Ltd.

If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document
(which contains full details of the terms and conditions of the financial product) and consider it before making any decision about whether to
acquire the financial product.
Disclosure
The directors and associated persons of State One Stockbroking Ltd may have an interest in the financial products discussed in this document
and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a
recommendation or dealing by a client in such financial products.

Page 3 of 3                                                                                   STATE ONE STOCKBROKING LTD AFSL 247100
                         This information must be read in conjunction with the disclaimer at the end of this document

				
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