Yesterday Pryme BV, a Dutch based plastic recycling company announced its partnership with Shell. The share price jumped by 100% in two days. It now trades at 44 NOK. Pareto has price target of 150 NOK. Plenty upside potential.
Pryme is currently building its first plant announced its partnership with Shell. The importance of the agreement could be illustrated by Shell press release stating:
SHELL AND PRYME SIGN STRATEGIC PLASTIC WASTE TO CHEMICALS COOPERATION AGREEMENT
You can read the press release below:
Pryme jumped by 74% yesterday and is up further 13% today. It is still well below its IPO price. I am long Pryme and I expect further re-rating as the newsflow on construction progress would be comming in Q4 and Q1.
Below is Pareto Securities comment on the partnership:
The partnership with Shell is the perfect catalyst to revive Pryme’s investment case as it provides comfort on the promise of the technology, scale of upside potential and derisk offtake of produced products. With a market cap of EUR 60m post today’s 74% share price increase and a value potential of >EUR 100m from the initial plant alone, we continue to find the upside potential appealing. Upon success at the first plant next year, we think the market also will attach value to future growth that likely can be turbocharged by Shell. While the share price has traded down on weak peer performance and lack of news flow, we keep BUY/TP NOK 150 unchanged as Pryme continues to deliver on its promises
Fusion Fuel
Last week I wrote here about Fusion Fuel, that has a unique technology for hydrogen production through its sun powered technology. The company now trades at 57% of its cash balance.
Madrid project of big strategic importance
Fusion Fuel (Ticker HTOO) announced a new project with Exolum (leading European fuel logistics and storage provider) yesterday to develop a turnkey solar-to-hydrogen plant to supply green hydrogen to Madrid. Fusion Fuel will install 21 of its HEVO-SOLAR units along with a co-located refueling station. In addition to producing hydrogen from solar radiation during the daytime, the facility is expected to double its output by leveraging other sources of renewable energy to produce emissions-free hydrogen at night. We spoke with management yesterday, they are ‘extremely excited’ about the project since Exolum has announced a consortium with Enagas and Naturgy to make a H2 refueling station network in Spain and they have not yet chosen a H2 technology provider. In other words, this is a strategic project for HTOO as they want to grab the H2 technology provider position and the initial project may be viewed as a demonstrator project. Exolum is massive and manages Europe’s largest network of refined products and are ranked second in Europe in terms of storage capacity and 7th in the world. Management says the relationship overshadows nearly all other announcement HTOO has made.
I expected a strong move on the announcement. Surprisingly, the share price did not move.
I am long Fusion Fuel, because it trades at 50% of its cash, it has a unique technology that is certified to work and it has real contracts. Attractive risk reward opportunity.
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