Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I’m still sat on the sidelines for now but thought I’d contribute a potential positive tail wind for Itaconix which I think has been overlooked.
In its most recent presentation Itaconix commented that it was unaffected by the Suez Canal shipping issue as all its raw material comes from the opposite direction. This has been mentioned on here.
But what I don’t think has been elaborated on is that this could give the company a financial and strategic advantage over other chemical companies who do traditionally use the Suez Canal shipping route as they have seen a 300% increase in shipping cost which they will have to pass on to customers.
It might encourage more companies to switch their products to include Itaconix formulations.
Thanks for that.
I have managed to get hold of the new Brokers Note entitled "FY results: strong cash flow".
Key points:
1. Valuation target retains at 325p with BUY rating (currently mkt price today is only 47% of Broker price target).
2. Broker valuation rationale :
“Our target continues to be based on two arguments:
a. the multiples applicable to a mid-cap chemicals company, and;
b. the value which we believe is applicable to Itaconix's differentiated market position and which would be relevant to an industrial third party." (so Broker is considering full opp. pipeline market value/+DCF going concern value to possible acquiror). "At our 325p target the stock would trade at 5.1x/3.7x 2025E/26E EV/revenue, which we believe would be highly attractive to an industrial buyer looking at markets with gross margins in the hundreds of millions of dollars annually.”
3. More discussion of underlying customer portfolio growth WITHOUT the 'low margin' customer - Observations:
Underlying revenue growth of post loss “core” business is v. large: “Excluding the major North American detergent merchandizing customer, we understand 2023 revenue was $3.6mn, and therefore growth from other customers in 2024E (largely derisked) is c.70% for 2024. We expect this growth to be across Itaconix's end markets, in cleaning, hygiene, beauty, and in various new industrial applications. We also expect growth to continue in 2025E at above 50% y/y."
4. Cash on Balance Sheet is sufficient until after FY 2026 when ITX business transitions to op. cashflow positive
5. Manufacturing building facility lease renewal for another 10 + years (confidence?): "In December 2023, Itaconix renewed the lease on its existing building to 2034, resulting in the recognition of a c.$2mn asset and c.$2mn liability under IFRS16."
6. Possible asymmetric Broker treatment (revenues v’s plant capacity) – the capex is still quite high during 24E/25E/26E => aggregate of $4.0m (about 2x a plants worth?) and ave recent depreciation is c$0.2m. So looks like we are replacing all the plant assets plus adding another one unless there is considerable re-tooling going on. Unless I have missed something there appears to be a mismatch since when we heard in the management call the other day – a denial for any new plant at this time for the foreseeable future. I’m scratching my head a little on this and can only assume the revenue line is light or the capex line is heavy. You can DYOR on this but makes sense not to over commit to possible upside revenue and be full on the cost/capacity area so perhaps that is the theme here - forecast prudence.
7. John said on the call that there should be some "news" in the short term (RNS) for diversification wins so I expect we will know more when that disclosure is made (leather/paints)
Looks like at least ITX senior team will be there:
3x Social media from team: Meet Itaconix at the American Oil Chemists' Society Annual Meeting
Schedule a meeting with CEO John Shaw. Learn how to increase performance, safety and sustainability without increasing cost using Itaconix’s plant-based technology platform.
Montreal Apr 28-May 1 #AOCS2024
https://lnkd.in/eJ5BhNDY
This will interest some... 'Researchers and manufacturers have been exploring alternative materials, including polymers, to replace PFAS in different applications.'
https://thehill.com/policy/energy-environment/4604573-epa-declares-forever-chemicals-pfoa-pfos-hazardous/
The threat of financial penalties always proves the stick to be more powerful than the carrot.
ITX LinkedIn team now posting on average almost every day for last month.
John S has been recently recognized in Bioeconomy daily digest for his contribution which I was unaware of. Go see for yourself there is lots now going on in the ITX market awareness building strategy. Soon new eeb site to back up the strategy.
It doesn't really matter....as long as they are financial motivated to excel/outperform and drive the business strongly
More exposure, rubbing shoulders with the big boys.
Both Presenting and Exhibiting
April 28-May 1, 2024, Palais des congrès de Montréal, Montréal, Québec, Canada
https://annualmeeting.aocs.org
Come hear Yvon DURANT on the Performance and Environmental Fate of Polyitaconates AOCS Annual Meeting & Expo
https://annualmeeting.aocs.org/program/technical-program
ATB
AJP
From LinkedIn
BioEconomy Daily Digest recognized John R. Shaw for l outstanding Leadership contributions to the bioeconomy’s development and project deployment. The Bioeconomy 500 honors scientists, engineers, policy makers, financiers, project developers, feedstock pioneers, offtakers, advocates and supply-chain and distribution partners.
“The bioeconomy has grown leaps and bounds in the past 10 years,” said Digest editor Jim Lane, “and it is usually told as a story of technologies and Net Zero pledges — but it is individuals who actually translate opportunity into accomplishment, and the Bioeconomy will recognize those individuals who played the leading part. Congratulations to all the winners and the supporters who nominated and campaigned for them.”
ATB
AJP
Some decent incentive for the directors here. And they also bought of their own accord a wee while back. I wonder what price they might be tempted to exercise at?
Looks like someone has actually found ITX on the OTC, first trade for a while.
https://www.marketscreener.com/quote/stock/ITACONIX-PLC-120795916/quotes/
5072 shares @ $2.00
Directors buy or just a PI?
ATB
AJP
Further exposure, getting the message out there
https://youtu.be/tUThv9FsoXw
ATB
AJP
Sorry got overly excited with my yearly typos but you get my drift I'm sure
In all seriousness. Its going to be really interesting how clever marketing and brand differentiation themes take hold of ITX ingredients and mould them into new product segments in sustainable paints and leather areas. Maybe SI is quietly waiting in the wings to see how that goes in H2 before he jumps back in Jan 2024 or may he miss the boat somewhat time will tell. However John's wide smile kind of tells a story that makes me want to be in this today not 2024 or 2025
I can only assume market formulation testing will be getting a bigger ticket area for ITX in coming months and quarters given all the spec chem ingredient exposure here with early adopters keen to re-segment their markets with new ECO minded customer products being target groups. Eg. New Delux 'ECO Sustain' TM branded wall paints for a greener better world. Marketers dream. I always wanted to be a marketer myst be great fun!
Itaconix Launches Biobased Functional Additives for Decorative Paints :
https://coatings.specialchem.com/news/product-news/itaconix-biobased-functional-additives-decorative-paints-000221458
Great interview. Been invested a good while now bur one of the things I've struggled to get my head round is direct competitors. Great to hear Jon confirm that when it cones to non fossil ingredients, there isn't a competitor. That's very reassuring!
I still think we can expect future govt policy around micro plastics to give us a good knee up
(Accidentally posted too soon)
I presume the customer would just revert to the previous (pre-ITX) formulation, so wouldn't really take any time to change back.
Maybe the cost of old ingredients came down and used that as leverage against ITX?
I'm not holding my breath for the customer to come back, but I would like to see the lost low-margin profit replaced by higher margin beauty and hygiene sales.
I p
Justdeezerts commented -
"Apparently, our 'lost' customer will more than likely have to replace ITX product with petroleum-based alternatives - well, good luck with that!"
I guess this could take a while so they are probably still using ITX product and will very likely need more before they reformulate, therefore, the reduction in revenue may not be as much as forecast in 2024.
Bearded - Let’s see how well your post ages. Today’s rise on a bit of publicity won’t change the fundamentals for 2024.
No hidden agenda. I’ve made my intentions very clear.
I believe the time to buy will be next January before the H2 trading update. That’s the earliest we will get any insight into the expected improved margins because of the timing of the exit of the largest customer during H1.
I continue to maintain there will be share price drift downwards unless the company salvages a deal with its largest customer. The figures don’t lie!
Hi DB/Elsol
Spredsheet updated to show 160 metric Tonnes of raw material delivered this year so far.
https://www.seair.co.in/us-import/product-itaconic-acid/i-chemtan-co-inc/e-qingdao-kehai-biochemistry-co-limited.aspx
1 16/06/2022 COHECTASE2035082 Itaconix 19800 20PKG
2 03/07/2022 KLSQTAOKW2204354 Itaconix 19800 20PKG
3 04/08/2022 EXDO62Y0220197 Itaconix 19800 20PKG
4 25/08/2022 EXDO62Y0220796 Itaconix 19800 20PKG
5 15/10/2022 KLSQTAOKW2208079 Itaconix 39600 40PKG
6 19/03/2023 TXSLQD2302Y376 Chemtan/Itaconix 19800 20PKG
7 19/03/2023 TXSLQD2302Y375 Chemtan/Itaconix 39600 40PKG
8 02/05/2023 UULNQD23030547 Chemtan 19800 20PKG
9 01/07/2023 TXSLQD2305Y361 Chemtan/Itaconix 59400 60PKG
10 09/02/2024 UULNQD23120454 Chemtan 39600 40PKG
11 15/02/2024 UULNQD24010550 Chemtan 39600 40PKG
12 20/02/2024 https://www.seair.co.in/us-import/product-itaconic-acid/i-chemtan-co-inc.aspx Chemtan 39600 40PKG
13 25/03/2024 https://www.seair.co.in/us-import/product-itaconic-acid/i-chemtan-co-inc.aspx Chemtan 39600 40PKG
ATB
AJP
Good interview with Ian King on the Business Section - a great promotional opportunity, well taken!
Back to JS's presentation - I listened carefully to the explanation of the lost customer and it was interesting to hear that the breakdown in negotiations was NOT as a result of failing to agree a price increase, but related to ITX refusing to give away to this (greedy?) long-standing customer, all of the post-pandemic global cost savings attributable to ITX's unit cost.
Presumably the cost-savings demanded were more than the profit ITX had been making on the $2m contract - so JS walked away and good on him for holding his nerve.
Yes, a major set back in revenue streams and profitability by about 12 months, but rather have this pragmatic conclusion, instead of reporting results next year that we are selling volume product at a loss.
Apparently, our 'lost' customer will more than likely have to replace ITX product with petroleum-based alternatives - well, good luck with that!
We look forward to welcoming back this customer, next time with cap in hand - so, fingers crossed....
GLA and DYOR