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£16m cash raise completed 11 months after the last one. £1m to private investors and over £10.5 m to new institutional investors (less likely to trade short term) This raise is being used for technology advancement, land purchases and equity investment in short term cash generative projects, so value add and not 'lifestyle' or 'keeping the lights on'. A director took £100k at placing also.
Revenue CAGR (% increase per year) expected to be over 65% over the next 5 years. Over the next 2 years this figure is over 400%. Pipeline is sitting at over €600m (as of April) with only quality projects added to the pipeline during the vetting process.
€15.5m revenue (€3.5m profit) expected in 2021. 2021 is expected to be the first year of profit and with a fraction of the marketcap of likes of ITM or CWR. ITM will not be in profit for a few years yet. Eqtec pipeline exceeds that of ITM and CWR combined..
ii very bullish on EQT:
https://www.ii.co.uk/analysis-commentary/how-alternative-energy-beat-oil-and-gas-aim-2020-ii514770
2020/2021 court case for falsely claimed patent infringement in the USA has been thrown out, as agreed by all parties in a motion to desist with prejudice, meaning no further case can be filed in this matter. The platif, Aries Clean Energy claimed patent infringement against EQT which was an opportunistic lawsuit with little merit due to EQT having prior art and historic use of gasifiers pre-dating the patent filing.
Eqtec currently lack a large multinational EPC partner. Other green companies have enjoyed share price rerate on such partnerships.
There is a backlog of financial closures on deals originally scheduled to be completed H2 2020 due to Covid. There is a new deal structure in place now. The first payment at financial closure is now for 40% of capex revenue payable to eqtec (around 35% of total capex is revenue paid to Eqtec), this was previously 25%.
https://www.inspiratia.com/renewables/regions/eu-europe/uk/region-insight/article/eqtec-ceo-companies-like-us-are-becoming-the-prize
Align research note available online, price target 3.1p http://www.alignresearch.co.uk/cpt-company/eqtec
Account needed to view - latest note from Arden May 2021 with buy rating and price target 5p
https://research.arden-partners.com/portal/portal.html
Video presentation with slides - **very informative** on company's corporate strategy:
https://dt9xom8irs6kr.cloudfront.net/u238195/144695-2877389305321170519.mp4
Latest proactive videos with CEO David Palumbo
https://youtu.be/nCuosGed0gU
https://youtu.be/fWOAP-kvpJ8
David Palumbo interview starts at 14m in podcast and discusses the RDF market and potential dominance of EQT:
https://mobile.twitter.com/thejointventur1/status/1319635982220775426
Looking back at the JV’s of ITM, CWR, PHE, AFC and how the share price reacted.
Firstly ITM JV with Linde October 2019 was for a placing of 20% of ITM’s shares at a 15% discount. The share price then rose from 40p to 289p a year later (£200m market cap to over £1.2B market cap. The ITM pipeline October 2019 was £379m (October 2020 current backlog of £118.7m (previous high £55.0m) and tender opportunity pipeline of £324.9m)
https://fuelcellsworks.com/news/itm-power-announce-joint-venture-with-linde-ag-and-38m-strategic-investment/
CWR JV with chineese auto manufacturer weichai q4 2018 £30m for 10% of Ceres (20% for £48m total investment including warrant exercise)
BOSCH were also a partner at the time, Nissan and Hyundai are also partners. Share price stagnent for the next 18 months then shot up from 200p to over 1000p. Revenue June 2018 full previous year was £7m and order book October 2018 £30m.
Order book* of £54.3m and strong pipeline* of £44.4m as at 31 December 2020
2020 revenue £21.9m with a profit margin of 67%.
Market cap today £1.8Billion
https://www.ceres.tech/news/ceres-power-and-weichai-finalise-strategic-collaboration-and-jv-agreement/
AFC partnership is with ABB a large global power component manufacturer and EPC. Market cap 4x eqtec and many years behind eqtec on a vs / vs comparison of revenue forecast.
PHE partnership is with peel a waste management company, many years away from profit
Bandicoot.... As the old saying goes, the stock market is the only place where you get a really good sale price and everyone rushes for the door!
Here is a link to that PHE vs EQTEC summary posted on telegram the other day
https://t.me/eqtec/8823
This is only going way way over time. Are you really going to settle on a loss when we could be 5-10p by EOY? Absolutely beyond me why anyone would sell at these levels. In my eyes it's almost impossible that this company doesn't succeed now. Everything is in place, just a matter of time. All this doom and gloom is based on zero evidence, fuelled by a cool off period from a huge overbuying period at Christmas.
Massively oversold now, which is bullish. This'll move quickly soon, was here for the last wave and I'll certainly be here for the next one. Still up 150%, no risk for me so happy to let it play out for the next 2-3 years. We're going to fly past PHE, I've said it before. They don't even come close to EQTEC's business model.
"over the next few months we expect the strong flow of news from the company to accelerate"
This was almost 4 weeks ago now.
At that time of the placing there was a £100k director buy, and 90% of the fundraise was institutional investors with Altair taking a few million £.
Interesting that Align research are still working on their updated price target. Last time they were doing this they released their updated price target on the afternoon of the operational update. They are likely waiting on the latest pipeline figures and/or another financial closure, collaboration deal or something else big.
with this great report no doubt we can all look forward to the share price tanking below 1p (as seems to be the running theme for dodgytec...)
ASSESSMENT
This is a substantial fundraising for EQTEC, which puts the company in an excellent position to accelerate both its near and long term revenue growth. We note that the placing was over subscribed, further demonstrating strong investor interest in the company and the alternative energy sector, with Ian Pearson, Non-Executive Chairman and Director, also putting in £100,000 of his own money.
Over the next few months we now expect the strong flow of news coming from the company to accelerate. In the UK all eyes are on the flagship RDF project at Billingham, which is anticipated to have a contract value in excess of €30 million to EQTEC and lead the way for two more similarly-sized UK RDF facilities in 2022, in Deeside, Flintshire and Southport, Merseyside. Meanwhile in Europe, EQTEC is pursuing multiple deals, mainly in Greece, Croatia, Italy and other central and southern countries. Five to eight deals are expected to close this year with contract values over their life totalling €20 – 30 million.
We last updated our valuation on EQTEC in April this year following the announcement of the surge in the project pipeline. At the time we expected a maiden EBITDA profit for the current financial year of €3.46 million, with this rising sharply to €23.5 million in 2023 as the substantial non-contracted pipeline is expected to translate into commercial success. However, with this latest funding round allowing the acceleration of revenue growth we now expect these figures to be materially higher and are currently working on updating our financial model and valuation.
EQTEC shares currently trade at 1.56p, pretty much half the value of our current EV/EBITDA/peer comparable valuation. of 3.115p per share. So with the shares looking extremely cheap even before our forecasts revision we are happy to retain a stance of Conviction Buy.
RISK WARNING & DISCLAIMER
EQTEC is a research client of Align Research. Align Research own shares in EQTEC
**** = research-tree
I see WH Ireland have a price target of 159p for AFC energy. (this would equal a market cap of £1.2B)
Their forecast revenue for 2021 is £1.5m and for 2022 is £4.3m
https://*********************/dashboard/DownloadResearchNote?id=41_2021062303065549297
https://www.whirelandplc.com/research-portal#/portal/whireland
Oh to be a hydrogen stock with ABB as a partner!
And me!
Me too.
AFC just had an incredible RNS..I am invested there and have had to be patient..I am prepared to be even more patient here as the company grows year by year. Good day all.