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So bond yields collapsing, and real yields on way down.
This should be hugely bullish for growth stocks, like hydrogen.
Yet here we’re are stuck at 60. Recall the collapse in share p since Feb peak had to do with interest rates on the rise. This argument has broken down.
TOO CHEAP HERE in an improving macro environment. BUY!!!

Incredible that the shares are falling.
What’s the market cap here sub £15m?
They have £6m cash, £1m paid for hydrogen acquisition. Pre H2Green acquisition stock was trading at £5m mcap without all that cash. So that’s trough valuation ex hydrogen. Pre covid, stock traded at £10m mcap - so it effectively halved last year.
So if you say the value of legacy business remains at £5m (consistent with halving of revenues), ie it will never recover from last year results (obviously incorrect given CEO comment yesterday of rebound, even setting aside move to critical minerals which itself could double legacy biz revenues) and value hydrogen only at cost of acquisition of £1m and add cash in hand you get to a total black-sky worse case valuation of £12m - which effectively means you don’t believe that the company will ever achieve anything and will never see any recovery to its legacy biz, ever.
So black black sky downside of £3m to equity value vs upside potential in hundreds of millions.
Stock just way too cheap.

.

https://www.valuethemarkets.com/2021/06/09/promising-future-getech-broadens-focus-green-revolution/

Press article from yesterday
https://www.valuethemarkets.com/2021/06/09/promising-future-getech-broadens-focus-green-revolution/

SOLID presentation by CEO yesterday; with POSITIVE outlooks for both hydrogen and legacy business. BUY on GREAT risk/reward profile (see my other comments). Hydrogen hub first tenders have already started

Takes of presentation:

*On legacy business:
-Evidence since start of 2021 that client activity is rebounding; with contracts being signed. (2020 annual results were hit by customer pause in short term projects - these are now resuming). Clearly reassuring, since the shares are down 12% since the annual results were published. CEO said “Much more constructive environment” in 2021.

*On H2 opportunity:
-Getech aims to generate in time a significant £40m EBITDA per year through 30 hydrogen sites in UK (and that’s still less than 10% of total UK hydrogen infrastructure/site market opportunity). (Note SGN has almost half of Uk gas distribution network - so in my view less than 10% could be conservative).
-Funding for sites at asset level. Funding partnerships include Government (via project grant funding); Strategic partners (including but not exclusively SGN - oil&gas majors and utilities increasingly interested in space); and infrastructure investors.
-Getech/H2Green are currently participating in a number of hydrogen hub tenders; launched by councils. These are in process. Delivery of first hydrogen gas in 2022 (!and 2023
-SGN agreement gives SGN option to take an stake in each chosen site. In active communication with SGN
-At acquisition, management of H2Green agreed to be paid 75% of consideration in shares of Getech - reflecting strong belief in their hydrogen strategy
-H2Green/Getech has unique proposition to SGN and a unique proposition for the market generally on hydrogen hub development - particularly appealing is the opportunity to apply Getech’s geospatial expertise in the selection of sites which can help achieve significant reduction in cost of hydrogen (>20%). SGN, is in effect a gas pipe operator, does not have the competencies internally to do so alone. What SGN have is a large disused land package and it is on these that they aim to build the hydrogen hubs. CEO said they offer a “Very creative solution to generate return to an asset which is effectively a dead asset (disused land) for SGN and which create mutual value.”

*Other opportunities
-Getech aims to expand its customer proposition to critical minerals mining/geology (eg Lithium). Mining currently makes up 5-10% of Getech revenues; and the upside potential to this is significant. This would translate into pure profits since very little costs associated with this revenue that would come from expansion into critical minerals vs oil&gas (ie highly margin accretive)
-Getech is the largest provider of gravity magnetic/ip data globally. And their customers include the key oil&gas majors (eg Shell). As well as for critical minerals explor, data can also be used for growth area, geothermal.

*Catalysts:First tenders (in progress), partnerships/funding discussio

A/c to Platts Hydroxide prices have reached a whopping $14.5k.
That’s more than 20% higher than the prices applied by lithium resource plays in their scoping/feasibility studies.
In other words, it’s equivalent to something like 30-40%+ to their published NPV.

Yet, here we are stuck at 13p as though the commodity price hadn’t moved from $12k, the market totally missing this.
Market totally missing too that EMH shares are on the rise - our next door neighbour literally - in anticipation of battery plant agreement between Cez and Skoda - which would be some 50km away from Cinovec resource.

And here we are back at 23.
And market here implicitly therefore valuing in the shares the hydrogen opportunity at £1m; while the upside potential from hydrogen is £400-500m (see above).
What’s the downside?
NO BRAINER.

Co saying at Cenkos preso they aim at having 20-30 hydrogen sites in Uk mid-term. Each site 1-2m of EBITDA => so looking at massive c£40m EBITDA/ yr as end game.
They re starting to look at first tenders.
Final investment decisions on first sites next year.

(For reference, if they ever achieve these figures, you d be looking at a valuation of the company at >£400m (!), I believe…)

https://www.energy.gov/articles/secretary-granholm-launches-energy-earthshots-initiative-accelerate-breakthroughs-toward

(In case the link I posted above didn’t work)

(Recall that I previously said 3x upside. I stick to that. £1bn is low case valuation - a floor)

BIG push this week by US DoE on hydrogen. US energy secretary quoted saying yesterday ‘ “First up: Hydrogen Shot, which sets an ambitious yet achievable cost target to accelerate innovations and spur demand of clean hydrogen. Clean hydrogen is a game changer. It will help decarbonize high-polluting heavy-duty and industrial sectors, while delivering good-paying clean energy jobs and realizing a net-zero economy by 2050.”

https://www.energy.gov/articles/secretary-granholm-launches-energy-earthshots-initiative-accelerate-breakthroughs-toward’

As I have said previously, assuming a highly conservative £30m/yr
of sales mid-term at AFC ( that’s only 0.15% of diesel generator market) and applying the Plugpower sales multiple we get to £1.2bn valuation for AFC.
Discount that back to today at 8%: c£900m valuation.
And this is on super conservative market shares assumptions of diesel generation alone and nothing else.
TIME FOR RERATE

EMH shares rebounding on expectations of offtake woth agreement between Cez and Skoda on battery plant expected this month.
This is the SAME resource on German side of border.
=> ZNWD NEEDS to RERATE accordingly.
Cant be trading at an increasing discount to your next door neighbour who is about to get an offtake while you are a key takeover target.
BUY!

Ok some maths.
We are at 15m mcap.
Take off cash: say c7m.
= £8m

Market cap pre hydrogen acquisition
£5m. (At time when shares were at lows and had halved vs 2019 - consistent with a halving in revenues)

Say, with covid trough behind us, and recovery in oil prices; we value the legacy business now at 7m, instead of 5m.

=> Implicitly the share are valuing the enormous hydrogen opportunity at a ridiculous £1m!

This is a BUY here!

2020 annual results are out. Weaker results already discounted in a share p which had effectively halved vs 2019, pre hydrogen acquisition.
Meanwhile, these results are based on the legacy business only - which services oil&gas industry/customers foremost. If you look at price of Brent - it’s today at $70. It effectively doubled vs H2 2020.
So reason to be optimistic for 2021 on the legacy business for a return to trend vs 2019; as oil&gas clients resume capex spend.
Finally, remember that the company had £2m of cash as at end 2020, then raised £6m more this year.
So bear that in mind when you look at our market cap… 30-40% of our mcap is cash - which is significant.
Key to this stock now, is hydrogen. That’s where things can be truly transformative.
Presentations on this tomorrow+Wednesday. Tune in.

Great interview - from veteran in space. Market not giving enough appreciation for this key hire.
Highlights how it’s not just the $20bn diesel generator market that AFC’s technology is superior at, but now also maritime - another multi billion market.

Inobat has a pilot plant in Slovakia.
Where the ore is processed however doesn’t change where the ore comes from.
Othersise, EU would instead be fully focusing on building processing facilities, rather than banging the table about critical raw material independence.
The EU will talk with non EU countries for supply of raw material, including Serbia, and allied countries like Canada and Australia. So I am very confident Jadar will materialise. But again, my point is, I suspect priority is to EU lithium resources first. And currently, EU options for lithium resources are becoming scarcer...

The Jadar mine is in Serbia.

Jadar is not in the EU.
The EU will want to prioritise EU projects.

That’s precisely why I am saying VW would take 49% stake.
Zinnwald already has a mining license in place and competed EIA , and just like Cinovec it’s for an underground mine, not an open pit.
While I sympathise with your view, I disagree with your arguments, since the not in my backyard argument applies to all mining projects.
I think the Cinovec asset on both German and Czech side becomes ever more important now for the EU after the crumbling of Infinity Lithium asset in Spain, and now some question marks over Savanah R Portuguese asset.