RE: Zeus capital valuation.19 Apr 2021 09:17
ZEUS CAPITAL: 191 pence
"AFC Energy plc (LON:AFC) is the topic of conversation when Zeus Capital’s Head of Research Mike Allen caught up with ************* for an exclusive interview.
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.
Since September, there’s been a number of positive developments in terms of new strategic collaborations with world leading organisations, there’s been investment to ensure capacity can be built up to satisfy demand and obviously the UK government has banned the sale of new petrol and diesel powered cars after 2030 and hybrid after 2035, that was previously set at 2040.
So, there’s been a lot of different market dynamic changes but the company have set themselves well with some future collaborations as well.
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......"
https://www.***************************/afc-energy-analyst-qa-positioned-well-for-future-collaborations-lonafc/412961612
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