MPC Energy Solutions – Priced at cash despite significant value potential in firm backlog.

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I am long MPC Energy Solution. It is one of the investments, that seems to be right, but takes time to move. This morning SpareBank issued new research report – summary is below:

MPC Energy Solutions | MPCES NO

Priced at cash despite significant value potential in firm backlog

This morning MPCES announced that it is has made its first investment decision on its execution pipeline by investing in a 3.4MW combined heat and power project in Puerto Rico. The project, which has a 12 year USD-denominated energy service agreement and is expected to produce 25.30,000MWh/annum, has previously been listed as one out of 6 projects to be financed by equity raised in the IPO. To our knowledge, the project was initially expected to be under operation in June, but is now expected to be commissioned by August. According to the company the project will yield returns in the range ~10-15% as guided in its prospectus. End Q1 2021, MPCES held a cash position of ~USD82.7m or a cash value per share of ~NOK31/share. In addition, MPCES was transferred an early stage development portfolio valued at USD10m during the IPO (value of ~NOK3.7/share). This stands in contrast to a current share price of NOK33.7/share and a P/B of 1.04x. In our view, the company is undervalued at its current share price and offers an attractive risk/reward.

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