I am big believer in chemical recycling. There are two leading companies – Quantafuel (QFUEL) focused on chemical recycling of plastic. and Pyrum Innovations (PYRUM) focused on chemical recycling of tires.
Both companies have strong strategic vision and I belive that both are best positioned to become global leaders in their field.
What they have in common
- Strong partners – both have BASF as the main shareholders. Pyrum has Continental as a shareholder and have backing from Michelin and others
- Strong management – Pascal Klein is equally strong as Dr Lach
- Technology superiority – both companies are the global market leaders in their technology. Pyrum si perhaps even a step ahead of QFUEL.
- Strong vision – both companies have credible plans how to transform their technological superiority to global production leadership
- High upside potential – if Pyrum and QFUEL would become global leaders by sales, the share price potential is meaningful – both companies could be easily 10 times more valuable in 3 to 5 years time frame.
- There are companies in the US that trade at USD1.7 bln market capitalization while being years behind QFUEL (PureCycle technologies, ticker PCT). This is an indication of upside potential.
There are few differences:
- Pyrum is already operation continuous production since March 2020. There was no single unplanned production interruption. It means you do not have the technology risk – two years of continuous production is good proof of the technology
- Pyrum is cheap vs QFUEL – Pyrum is valued at 50% of Quantafuel. This valuation difference is unjustified, given Pyrum being one step ahead of QFUEL as they are already in continuous operation since March 2020.
I am long Pyrum since the IPO and I doubled my stake in the last two weeks. I am long QFUEL.
Detailed investment thesis was published yesterday on SeekingAlpha:
Disclosure:
The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice.
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