Our family office was invited to participate on the call with QFUEL management yesterday. The family office that invited us owns above 1% of QFUEL. Our family office has a material position in QFUEL too. I summarize below the main takeaways :
No Skive delay
- The plant reconstruction is proceeding as planned.
- All equipment is either in Skive or is on the way with confirmed delivery in the first week of November.
- The management does not anticipate a delay in the plant modifications due to some equipment missing.
- The reconstruction should start in early November.
- The first modified line should be back in operations in the first half of December
- The other lines will be reconstructed right after that.
Proof of concept around year-end
- QFUEL has run numerous tests during the last months that make them confident that the proof of concept should be reachable around the year-end.
- This was said by Terje at the Pareto conference few weeks ago, and it was reconfirmed again today.
INdustrial-scale production in Skive expected in 2Q22
- The management expects it will take one or two quarters for the production to reach an industrial scale with meaningful revenues.
VItol plant permission by mid-2022
- At the Pareto conference, Terje stated that QFUEL selected a site for the Vitol plant in Amsterdam, and is submitting an application for building permits.
- The management confirmed today that permits could be obtained by mid-2022—the plant with then take 24 months to build.
- Vitol second plant is to be built in Antwerp. QFUEL is in the process of obtaining permissions for the Antwerp plant, which should be received within a year.
- There should be good news flow related to the plants progress in the following quarters.
Kristiansund production this year!
- The mechanical line 20k tonnes should start production by the end of this year. This should add to QFUEL revenues
- Chemical recycling plant construction should start next year and should take 24 months to complete
- The partner for the plant is BASF
ESbjerg partners
- The company has good interest from both industrial and financial investors to participate in the Esbjerg project. No partner was selected yet.
- They have all the permits for plant construction.
- Once the partner is selected, it should take about 24 months to complete.
QFUEL is building a relationship with US investors
- This year QFUEL participated in an investor conference organized by Bank Of America. The relationship is expected to continue with a goal to broaden the QFUEL investor universe. QFUEL hopes to participate on more US conferences
OUR TAKE
Very positive to get a reconfirmation of NO DELAY in Skive reconstruction. It was also positive to see their confidence in reaching the proof of concept around the New Year.
Share price impact: If you look at past price performance, when the market expected proof of concept, the share price jumped above 80 NOK. That is more than triple from today share price. The share price could easily beat this when proof of concept is achieved. That is 200% upside. If the proof of concept is again delayed, you could seek QFUEL declining to low 20s NOK. That is 20% downside. 200% upside vs 20% downside seems like a good risk reward.
The company is very active in preparing new plant projects. Once the proof of concept is achieved, there should be a lot of traction – there will be four large plants under construction at the same time. There should be a lot of positive newsflow.
Interesting article on QFUEL in Der Aktionaer:
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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