Quantafuel – Back in Operation – Broker Comments

Fearnley Securities: QFUEL announced this morning that repairment of the burner chambers of the two first lines have been completed and tested for production. Both lines have converted plastic waste at a high load after repair completion, and the plant is gradually returning to production.

The timing is in line with QFUEL’s target (announced early February) to resume production in the two lines by mid-March. Going forward, focus remains on increasing uptime and capacity in the production lines to reach Proof-of-Concept.

ABG Sundal Collier:

Quantafuel is back in production on SkiveABG Sundal Collier acted as joint bookrunner in the NOK 400m private placement in Quantafuel
QFUEL (B) announced this morning that it has completed the repair work for the first two production lines in Skive. Both lines have been tested in production and have converted plastics at high load after the repair. The plant is gradually returning to production now. This is in line with the comments from the Q4 report end February where it stated that both lines were expected operational by mid-March. It is positive to see that Skive is now operational.

Note on valuation

Before the announcement on the production interruption QFUEL traded above 25 NOK. On the announcement it went down to around 15 NOK. Today the stock gained back to 20 NOK. We are still 20% below the announcement.

When the market believed that Proof of Concept is eminent, the stock was trading close to 80 NOK. Based on all the conversations we had we believe that the proof of concept is at max weeks away. There is plenty of upside.

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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. Please do your own research before making any investment action.

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