Malcy Blog. 170p is cheap ...21 Apr 2021 18:52
https://www.malcysblog.com/2021/04/oil-price-wentworth-kistos-president-hunting-and-finally/
Kistos
Today saw the restoration of the listing for Kistos with the placing having been priced at 155p. My first reaction is that the price moved to 170p but my immediate thought is that there should be significant rise from these levels pretty shortly as I am convinced that there is upside in the detail of the Admission Document.
As this runs to 619 pages I will excuse people not having read it all but there are some devils in the detail. The raise was £10m more than expected at £52.5m right at the top of the range and was more than twice oversubscribed. That means that those in PrimaryBid got some 40% of what they asked for as did the institutional subscribers. Look in the small print and see top quality blue chip investors and Schroders appear with over 9%, Fidelity 5.5% amongst others such as Canacord and Chelverton.
The home team of Andrew Austin and colleagues yet again found their wallets and added another big commitment of a short £3m. Obviously Tulip have also kept a 10.55% stake which shows even more confidence in the upside.
Overall I think that Kistos is looking in a very strong position, it has secured a potentially very exciting deal with Tulip, I recently spoke to Leo Koot of Tulip who thinks it is a good package of assets with room for growth, right up AA’s street.
Trying to put a target price on Kistos is not easy, it is further down the track already than RockRose was but then markets have changed somewhat and now it is all about energy transition. I can see very decent upside from here and without anything changing I have settled on 300p which would not overvalue the package or management’s skills at developing it.
Kistos is all about sector leading attraction and without doubt it has the potential to be first in the sector to have zero scope emissions which is what I think could promote such a rerating to the TP above, it is really aiming to set the bar very high indeed.
Stand by for an upcoming interview with Andrew Austin when I can try and expand on this deal and his ongoing plans for Kistos.
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