Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I haven't posted on here for some time but felt the new Zeus note today to do a good reason to. I do keep an eye on the board and I noted the positive comments shared by many (eg Escala's post of a few days ago which got over 30 recs). I didn't attend the AGM, but did view the webinar and know many who were at the AGM and I agree with Escala's sentiments.
The Zeus note released today gives a new sp target of 100p. I know some will say that is a significant fall from there previous target, but that needs comment.
Previous Zeus targets for AFC have not specified the mechanism of calculation (apologies if I have recalled that wrong) and there was no timeline. So assigning a target of 184p actually meant very little. Today's broker note is a 10- year DCF valuation based on close liaison with AFC (as Peter Dixon-Clark said) and so that 100p is their DCF value right now. That's a 500% upside.
There are a couple of other things worth noting. DCF valuations require lots of assumptions, a pivotal one of which is revenue. The Zeus note records the £600k revenue for 2022, and estimates the same for 2023. However 2024 revenue is set at £6m. Remember that AFC itself has informed this figure. That means that the year to which that £6m figure pertains starts in just over 5 months. Zeus also noted that the £600k for 2023 is low because only rental income will be bookable....they note that larger revenue will require sales. In other words Zeus, and hence AFC, think that sales will be coming from the period that starts in 5 months. That must mean Power Tower sales as orders must be close if revenue is to be recognised in 2024 and so presumably means sales to hire companies; this is important as this is the industry-wide model.
Zeus also notes that their assumptions re the uptake of Power Towers (presumably in the 30-50 Kv range) could prove conservative.
Listening to Adam on the webinar I do wonder if AFC is closer to a cracker partnership than apparent at present. This tech could rival the fuel cell side of the business in terms of value very quickly.
Put these things together and I think there is potential for an early re rate in the SP in the direction of Zeus' new target.
Was that post meant to be helpful Haggis? Unless the poster is one on filter already you have to read the post to know whether to filter it. Your MO may be to ignore anyone and everyone you dont agree with (Putin does that) but I have very few on filter, and certainly not jgbb. Yet. But now you have accused me of helping con men and liars.
You really do make my points for me.
Well thank you for making my mind up for me jgbb. I will not be posting in more detail.
The culture on this board is awful and responses like yours make it so. Posts over the last few weeks and months have been negative, and in cases vile. Hence the reason I stopped posting. I am not prepared to put time into this to be shot down by the usual culprits. It is not about being an elite group, but those who were there are certainly a better informed group. It was that information I was hoping to share. But you have shot me down jgbb so I'll carry on playng my "silly little games"
If those posters who know me on here want to contact me directly it will be my pleasure to send some recollections of the meeting/
I don't often post here these days, but I was at the AGM and it was great to meet up with PIs I have known for a long time. The four of us who met for breakfast have a combined time as shareholders of over 5 decades.
It says much that Wendy told me that just 10 private investors attended the AGM (plus some corporate reps....essential those with nominee accounts. I honestly feel that those not present now have no insight at all into the company that AFC has become and the paradigm shift since 2019. I left the meeting very reassured.
I had intended a detailed summary for the board, but having thought about it I agree with the comments of others. I do not think it will be well received. I will not mention names (you know who they are) but the serial detractors and pessimists will continue their endless negative rants (but without any grounds as they were not there), the constantly-ramping optimists who know more than everybody else will continue to think they know more than anyone (without grounds as they were not there) and the small number of posters who are nasty and mocking will remain exactly that.
Suffice to say that the HFC market has matured and the end-user requirements better defined and understood, and AFC is uniquely placed to meet those needs. It has understood the market (in my view) and has the right people in place developing the right products to capitalise.
I'm sorry I am not providing more detail here.
I should also add that that does not concern me as I think the outlook with the new solid cell range across data centres, marine and diesel back up is superb. I am less convinced re EV, but am buoyed that posters I communicate with elsewhere feel that the ABB relationship will bear EV fruit.
I am looking forward to the rest of this year to see where AFC takes us.
if we are still in a relationship with Rolec one has to ask what the point of that relationship is as it has produced the square root of nothing. It is hence no more than a distraction. Personally I think it foundered months ago.
Russia Mucksy? Just go to Salisbury and you will get an idea. Or look at flights where individuals are poisoned.
or you could consider the bigger picture and look at what happened in Crimea. But you still try to condone. And you bring Gadaffi in to prove your point. I think we can all see what values you stand for.
....continued
If my concerns prove founded then it will be mid 2021 before AFC is revenue generating. Not a problem if the potential of the company is realised…..the solid cell could be massive, and Alkamem significant. But it does mean that cash will be needed. I hope the government will see this and support (and tout) the AFC journey. I also think AFC would benefit hugely if a major company saw the potential and either partnered with them or took a stake. It could be the bargain of the year for Shell or similar to pay £60m for a third of the expanded company…peanuts to them, but transformational for their green agenda, and transformational for the attention AFC could give to commercial development of the solid cell.
I also hope AFC is talking to the likes of Grant Shapps who is clearly coming round to hydrogen. And Jo Bamford who could usefully look at fuel cells for buses and has the ear of government (and access to their wallet as shown by the recent hydrogen town announcement). The government needs to be green, it needs to identify the UK-based technology giants of tomorrow, and AFC is one of few candidates.
Just a few musings for a Saturday morning. I would love to see that RNS next week re sales. And we may get it. But the realist in me feels that there might be a bit of a wait yet. I still think it worth waiting. Just.
I don't often post these days, and my last post or two were pretty upbeat. These reflected my enthusiasm at where the company was going, its messaging and the apparent commercial traction.
Red_hornet's line below "....doesn't seem to be from EV chargers" caused me to reflect on this.
The good stuff: I remain very excited about the HydroX-Cell(S). I remember feeling when I first heard about it that it would be the product that makes AFC. I can't see how it won't make the L version redundant. It's power dense, portable, and can run off less pure H2, or NH3, at low temperature. What's not to like ? I felt then that trains and ships would be ideal markets and AFC has since mentioned these, but what about data centres, back up generation with a reduced footprint etc. The potential is huge.
Alkamem: AFC has significantly dialed down the rhetoric on this. It was initially presented as a wonder substance that would be highly disruptive and have huge margins. The latest update was less effusive, although noted its potential and the need for development to build robustness into the product. In some domains it now "matches" existing product performance. Clearly Alkamem has potential, but I am less sure that it is going to generate any meaningful near-term revenue unless some sort of licensing deal is done.
And so to HydroX-cell(L): I have looked back over the RNSs this year. There was an Alkamem update on 23rd June, and on 1st June the Acciona deal was announced. I think construction has great potential, as does the back up market, and construction sites rarely have space limitations so L rather than S will suffice. Possibly a very big market, but the trial is not until 2021 so near term revenue is not likely. So that leaves EV which has been expected to generate the near term cash.
The 19th May RNS was a covid update and just one line was about EV. It reported "an uplift in the number of proposals we are working on". The Covid update of 19th March made no mention of EV, the RNS of 9th March merely noted Tom Pollard's appointment, and that of 12th Feb reported a stop on the roadshow.
Given the above there has been no report or mention in 2020 of the performance of the EV system, the business model, the commercial progress or anything other than the vague mention of MOUs that may or may not relate to EV. It seems curious that EV is receiving so little mention when it is the hat on which AFC has hung initial commercialisation. AFC may prove my concerns unfounded with a RNS on Monday morning announcing sales, but I am worried that EV is being sidelined as the next big thing has come along. Is this a product that anyone wants? I really have no idea despite it being 18 months since EV was announced and eight months since product launch.
continued in next post......
Lots of (perhaps understandable) negativity here today.
I'd like to think we can still give the benefit of the doubt and accept some of the reassurances at face value. The Q&A alluded to a lot of ongoing interaction with various commercial entities, and the forward view from AFC still appears optimistic. The only reason to doubt that is the lack of detail or subsequent communication.
I hope Ab understands the concern this causes. We do not need weekly RNSs, but a weekly CEO update on the website would be a very helpful means of communicating and providing ongoing reassurance. Unless, as an earlier poster suggested, they really do have nothing to say.
There seems surprise that only 10 submitted questions. Few from here seem to have done but let’s see if we can prove it.
I know I did, and muscorum and Daz have said they did so the current list is:
Athansius
Muscorum
Daz
Piltick
Desertwolf
Doc7
Notes
Sonnets
If you submitted please add your name to the list and re post
Thanks Muscorum...I have corrected Athansius' mistake and removed Sky so 8 on the list. Maybe only 10 did submit questions!
This should help AFC's cause:
https://www.bbc.co.uk/news/science-environment-52418624
There seems surprise that only 10 submitted questions. Few from here seem to have done but let’s see if we can prove it.
I know I did, and muscorum and Daz have said they did so the current list is:
Athansius
Muscorum
Daz
Piltick
Desertwolf
Doc7
If you submitted please add your name to the list and re post
Exactly desertwolf. We don't have a test.
As well as having had Covid I also sit on a number of specialist committees that make the decisions and much of my doctoral thesis involved PCR and similar technologies. I am also well published in the field of clinical trials and peer review multiple journals so I understand sensitivity and specificity, as well as observational studies and epidemiological data.
That's only because we don't have an antibody test yet.
However it is well known that coronaviruses do confer immunity, although in some cases this is relatively short lived.
However, there has not been a documented case of re infection despite over 2 million primary infections despite the fact that we send Covid positive staff back into the workplace after 7 days.
Further to your 0734 post Notes I contracted Coronavirus (proven by antigen testing) during the course of my NHS duties. I am now almost fully recovered and have immunity. I could hence attend the AGM in the manner you suggest at pretty well no risk to me or to anyone else there. I Would be delighted to do so and to ask questions on behalf of shareholders in a professional manner.
Wendy monitors this board so AFC know the offer is there.
BW
Doc
It seems that the board has become a covid board; I hope the thread title will pull us back towards AFC.
Specifically, how do people think AFC will fare if there is a prolonged shut down? The SP seems to be weathering the storm ok so far.
My thoughts are that a shut down due to on going social isolation for 3-4 months will delay AFC but not do lasting damage. presumably some of the salary costs are supported by the government schemes, but the most important thing is that AFC has no debt to service. The directors' salaries may be the biggest drain.
So a delay of 3-4 months will simply be an interlude, and mean that orders and commercialisation will be delayed by a similar period of time. I still expect people to want to invest differently when all this is over, and AFC should benefit from that ....if they can get the message out. That might mean TUVA coming out of hibernation.
On a 1-2 year time line I still hope the sp will perform very favourably.
Balanced views welcome.
I don't post often these days, but have been in AFC for well over a decade now. Posts these days tend to get lost too quickly in a deluge of off topic debate or vacuous comment. I hope you will not mind me sharing my thoughts now however.
I am more optimistic about AFC than at any time over the last ten years....I'm even going to put some positive spin on the coronavirus!
AFC now has a suite of products about which they are very bullish. The results RNS this week was interesting for me as I see a multitude of applications mentioned, some of which they have not really been touched on before. Not only were trains mentioned, but mentioned in the context of people they were having discussions with. The in house broker has said that AFC will be revenue-generating this year (that means orders!) and has attributed a current value of 54p to the shares, albeit then risk-adjusted to 27p. But that figure takes no account of the smaller fuel cell which I think has enormous potential, or of Alkamem, which also has enormous potential. I think 27p as a fair present value is simply too conservative as it takes none of this into account.
So we have multiple intrinsic factors that bode very well; we have the right partners in place; we have lots of interest and resultant conversations with big players. Even the funding looks ok.
But the extrinsic factors look good also. The political landscape is firmly with us after many years. Institutional sentiment is with the H2 and green sectors at last. There is an awareness that has never been there before. Even coronavirus might help. How?
Well billions has been taken out of shares and put into safe havens over the last week or two. In a few months coronavirus will blow over, however bad it gets (every pandemic in history has) and confidence will return in the markets, just at it always does. And that money, which will have been taken out of oilies and banks and airlines, will be looking for a new home in the market. Many will wish to invest in green issues, in new tech and in potential growth stories. And AFC may be a prime candidate for that money just at a time when we are taking our first orders and have real momentum.
Someone asked earlier on here what the SP will be at the year end. I really have no idea, but I do think that, if expectations come to pass, we will have a MCap to rival ITM or even Ceres. And ours might be based on predicted near term earnings. £30m profit a year on a PE of 20 (low for this sort of scenario) equals £600m.
That £1 party doesn't seem as far away at it once did.
Good luck all.