191p valuation17 Feb 2021 20:04
AFC Energy Analyst Q&A: Positioned well for future collaborations
February 16, 2021
Q1: AFC Energy, can you just talk us through your latest note and explain the approach that you used in your valuation?
A1: We’ve issued a note earlier this week and we’ve updated our valuation following the initiation note that we dd back in September.
In terms of the approach we took to valuation, they obviously set up a collaboration with ABB recently and we’ve looked at the agreement and the platform the company would have with ABB and we’ve started looking at the potential valuation impact. So, we’ve looked at the major markets where ABB and the company work together and we’ve ascribed 131.5p of DCF value and that’s just considering them working together in the US, Canada, Germany, France, Italy, and Spain, obviously, ABB are in over 80 countries so the upside could be bigger. We’ve also ascribed some value to the EV opportunity, mainly in the UK and also the upside with diesel-powered generators as well and that opportunity gives us value of around 60p.
So, taking that the total of that gets us to a valuation of 191p which we think is centred more on this existing capital structure.
To add to that, there’s a lot of things we’ve not considered in the valuation as well so we’ve not put everything into that valuation at all, we’ve ignored wider markets with ABB and we’ve ignored product development with ABB as well. We’ve also haven’t looked at the temporary power market on a global basis which could be an opportunity, we’ve not put anything in for the AlkaMem as well and they’ve recently signed an agreement with Ricardo and we’ve not put anything in there.
There’s a lot of opportunities that could come in quicker than what we currently expect.
https://www.***************************/afc-energy-analyst-qa-positioned-well-for-future-collaborations-lonafc/412961612
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