I summarize two interesting hydrogen ideas for this week

Pareto Securities: Hydrogen Pro – Attractive Hydrogen Exposure

Below is a summary of the report published today:

Attractive hydrogen exposure

HydrogenPro will release its Q2’22 figures tomorrow and we look for comments on manufacturing facility opportunities and the order/contract possibilities. With HydrogenPro chosen as provider of electrolysers for the world’s first and largest integrated clean hydrogen production and storage hub to have reached full financial close, we find its offering verified. Buy, TP NOK 30.          Q2’22 report 23 August HydrogenPro will release its Q2’22 financials tomorrow where comments on the manufacturing facility and order/contract opportunities are what we look for. Q2’22 financials in itself will play a lesser role as revenue from the large Mitsubishi order first will come in Q4.  Set for sound growth HydrogenPro will start to book revenues from the USD >50m order it received from Mitsubishi later this year, but we have pushed it out in time slightly to account for the manufacturing facility taking longer to complete. This also affects the timing of revenue from new potential orders, so we also push some revenue from 2023 out in time (as new manufacturing at the 300 MW Chinese plant beyond the Mitsubishi order first can start in ~H2’23). The company is however set for large growth with the Mitsubishi order and the magnitude of the project is verifying HydrogenPro’s offering in our view. The Mitsubishi project in the US is one of the largest renewable hydrogen energy projects and became world’s first and largest integrated clean hydrogen production and storage hub to have reached full financial close, following the closing of a USD 504m loan guarantee from the Department of Energy. See page 2 for more comments on the project. The company is working on several FEED studies and FID for the more known DG Fuels and H2V Dunkirk projects is expected before year-end.   Buy, TP NOK 30 reiterated – significant upside longer term We maintain our TP of NOK 30 and Buy rating as we keep our long-term estimates unchanged. We include a 15% WACC in our DCF for now, but as the company gets orders and the electrode coating technology is proved large scale and in larger systems, we argue that the cost of capital should come down and see further upside. The share trades at a massive discount vs other hydrogen peers which we find unjustified. Buy reiterated.

Fusion Fuel Green

I saw a good article on Fusion Fuel on SeekingAlpha. It specializes in designing and producing solar-powered hydrolysis units meant for green hydrogen production. The production process is now fully price competitive vs hydrogen produced from natural gas.

https://seekingalpha.com/article/4535744-fusion-fuels-eu-has-no-choice-but-to-embrace-hydrogen-economy?mailingid=28784185&messageid=2800&serial=28784185.209&source=email_2800&utm_campaign=rta-stock-article&utm_medium=email&utm_source=seeking_alpha&utm_term=28784185.209

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.

We have several pharma investments. One of the largest is our Vicore position. It is one of the most interesting plays according to Pareto analyst. I enclose summary of the Pareto note from this morning.

Vicore is below radar screens of many investors. The upcoming 4 September conference, which is the major event of the year for Vicore field, could be a turning point for Vicore. Pareto analyst: “With this upcoming event, clearly superior clinical data vs. the competition, we believe Vicore Pharma will gain significant attention.“

IPF data to be presented alongside competitors at conference Vicore Pharma today announced that the interim data in IPF will be presented at the European Respiratory Society (ERS) congress in Barcelona on September 4, 15:00 CET. On the same day, (previously published) data from Boehringer Ingelheim and Pliant Therapeutics will be presented. Best data reported from Boehringer’s BI 1015550 to date, is a mean increase in forced vital capacity (FVC) of +5.7 mL after 12 weeks. Best data reported from Pliant Therapeutics’ PLN-74809 to date, is a mean increase in FVC of +24.6 mL after 12 weeks (only one group, rest experienced declines in FVC).  As a reminder, Vicore’s C21 IPF data included not just longer & thus more robust follow-ups (24 & 36 weeks) which showed a trajectory, it also reported much higher mean increases in FVC with +251 mL at week24 and +751mL at week 36.  From our study of IPF related FVC measurements, we would consider short term changes in the range of +/- 50-70 mL as within the variability of these measurements. With this upcoming event, clearly superior clinical data vs. the competition, we believe Vicore Pharma will gain significant attention. Further, we believe that it is possible (due to time passed since last follow-up), that Vicore will release new clinical data from its IPF trial in the coming 1-3 weeks, which we expect to be a major catalyst by itself. We reiterate our Buy rating on VICO with a target price of SEK 97/share.

Our other pharma positions include Biovica, Bioinvent, Eigr, Sedana and Calliditas. We wrote here several times on those opportunities.

Biovica, that recently obtained FDA approval for its innovative breast cancer test will be presenting to investors their product lunch strategy. See https://fitinvestmentideas.com/2022/08/16/biovica-invites-to-market-update-after-its-fda-approval/

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.

We have been very bullish on Biovica. I wrote here several times about the opportunity, I published articles on SumZero and SeekingAlpha. We viewed the likelihood of the FDA approval for its Breast Cancer Test as over 90%. Market gave it much lower probability, the not patient retail sold the stock. Biovica got their FDA approval about two weeks ago. The company is now preparing its US and European market lunch. We are bullish Biovica

Our last write up on Biovica https://fitinvestmentideas.com/2022/08/01/broker-comments-on-biovica-received-fda-approval-for-first-ever-biomarker-in-its-field/

Biovica announcement:

Biovica invites to market update on 18 August 15.00 – Bringing DiviTum®TKa to US patients

Biovica, active in cancer diagnostics, is hosting a market update due DiviTum®TKa’s US market approval received on July 29 from the US Food and Drug Administration (FDA).

At the update on Thursday 18 August 15.00-16.00 CET, CEO Anders Rylander will give a short introduction. Joakim Arwidsson, VP RA/QA, about the 510(k) clearance, Henrik Winter, SVP Business Development, will describe the clinical application of the test and Warren Cresswell, President Americas, will describe the US Go-to-market plan.

DiviTum®TKa received 510(k) clearance on July 29, 2022, as an aid in monitoring disease progression in previously diagnosed hormone receptor positive, metastatic postmenopausal female breast cancer patients.

Link to the event: Biovica International Market update FDA clearance 2022 (streamfabriken.com)

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.

Arctic on African Energy: “From waiting game to action time”

Africa Energy and Africa Oil have a lot of catalysts in 2H22. The consensus is very bullish. Today Arctic joined the bullish analysts crowd on both stocks. Summary below.

Africa Energy is our largest position in the sector, Africa Oil is the second largest.

Africa Energy Corp Recommendation: Buy · Target Price: SEK 4.5 (3.5) · Current Share Price: SEK 2.82

From waiting game to action time

Since YE’20, Brent is up >90% and European gas price are up >10x, while AEC is down 15%. The reason is likely lack of operational activities and newsflow. This is however likely to change over the next six months, with drilling of Gazania-1 in Block 2B and the finalization of a gas offtake agreement on Block 11B/12B. We find the current entry point attractive and raise our TP as we have updated our commodity price assumptions.

Gazania-1 on track for spud in September – potential to justify 3 SEK/sh The Island Innovator semi-submersible drilling rig is expected to start drilling the Gazania-1 well on Block 2B next month. Oil was discovered in the license by Soekor in 1988, which has de-risked the formation and the geological chance of success is now deemed to be >50%. Due to its location in shallow waters, the minimum commercial discovery size is, according to AEC, less than 50 mmbbl, whereas the best estimate of the prospect size lies above 300 mmbbl. We have currently valued the prospect to 0.8 SEK/sh, while in a success scenario, its full un-risked value potential could be >3 SEK/sh. Block 11B/12B soon to move into a new phase Negotiations around gas offtake terms for a development of Luiperd/ Brulpadda are likely to be concluded before the Production Right- application is handed in to the authorities, and the latter is subject to the nearing deadline of September 2022. In addition to paving the way for monetization of existing discoveries, this would open up for a new exploration phase in the license, which clearly would be in the interest of AEC. Valuation and recommendation Its puzzling how AEC has massively underperformed in a period when a wide, global energy crunch has developed. Block 11B/12B has a role to play to ease the crisis, through offering a long-term, stable gas supply to the African region that would replace coal and be highly profitable for all stakeholders involved. Our TP is set a P/NAV of 0.9x. However, as highlighted, the NAV could see significant upward revisions over the coming next months.

Africa Oil Corporation Recommendation: Buy · Target Price: SEK 34.0 (33.0) · Current Share Price: SEK 20.3

A stock to have on the radar this fall

The highlight of AOI’s Q2 report was the launch of a 10% buyback program that we believe should contribute to narrowing the discount to core NAV. AOI’s net debt (incl. Prime) as of end-Q2 came in USD 20m better than our estimate. This, combined with the share price increase in Africa Energy, drives our TP increase to SEK 34 (33). The main trigger later this year continues to be appraisal of the Venus discovery.

Another quarter demonstrating strong cash flow AOI (incl. Prime) turned net cash USD 21m as of end-Q2 (vs. ARCe USD 0m), driven by another cash flow beat from Prime. Production averaged 25,300 boe/d, which is stable QoQ and we have only fined-tuned our estimates. Several high impact triggers could materialise over the next 6-12 months The Venus appraisal drilling program is expected to commence later this year. Should a resource estimate of 10bn bbl recoverable eventually be confirmed, and one applies a conservative NPV/bbl of 3 USD/bbl, the discovery has potential to contribute ~38 SEK/sh net to AOI. In Nigeria, early license extensions would accelerate dividend streams from Prime to AOI and quickly trigger highly profitable investments such as the Preowei project. AOI also has ample M&A capacity and is, according to management, actively pursuing sizeable opportunities. As the company will not sacrifice shareholder returns (demonstrated through the initiation of the buyback program) and has a successful M&A track record, we believe a potential transaction is more likely to be accretive and well-received than the opposite. We still view Kenya as a risky but high reward option (not included in our TP), as it will be critical to secure a new partner in order to mature the project to FID. Valuation and recommendation Our TP is set at core NAV, amounting to 34 SEK/sh, whereas our full risked NAV stands at 42 SEK/sh. As the downside is well supported by Prime’s producing assets, we find the risk/reward to be asymmetrically skewed to the upside.

Disclousure:

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.

SpareBank published a new note on Mintra today, summarising their target price uplift. They argue that the two largest shareholders may buyout Mintra and take it private. The summary of the note is below.

I never wrote here about Ocean GeoLoop, a novel carbon capture company. Our family office has a smaller position there. The company today announced that Chevron invested 100 million NOK at 28% premium to yesterday close. That is one of the largest premiums we saw for such transaction in Scandinavian market. Both companies signed MoU on future cooperation. OCEAN is up 24% now, but still below the share price Cheveron paid. Interesting opportunity for further analysis. I enclose below a Clarkson note on the announcement.

Todays note on Mintra by Sparebank

Mintra (upgrade): Yesterday, we upgraded our recommendation from Neutral to Buy in MNTR and increased our target from NOK3.6 to NOK5 per share.
 
Following the 2Q22 report, we make positive changes to OpFCF. Indeed, even though we lower our revenue estimates slightly (model 3.5%/8.2% and 9.1% YoY growth in 2022/2023/2024), we increase our EBITDA 4-5%. This is primarily related to the trailing 12m improvements, which is solely related to lower opex base. Coupled with more or less unchanged capex expectations, our OpFCF for 2022 and 2023 is upped 7% and 6%, respectively. Our 2023 EPS however is upped 15%.


The main reason we upgrade from Neutral to Buy is 1) new owners in place with Ferd and Tjaldur owning 40% of the company giving us more comfort with the underlying development, 2) attractive exposure with more than 50% of revenues coming from energy related business, 3) another quarter with OpFCF beat leading to 5-7% higher OpFCF estimates, 4) valuation support with 2022e and 2023e OpFCF yield of 9.3% and 11%, respectively and 5) the optionality that the company is a perfect LBO candidate.


With regards to the latter, on slide 5-7 we have conducted a simple LBO model to illustrate the potential in Mintra as a public to private candidate. First, the two largest owners owns 40% of the company and the reminding free float is negligible. The actions we believe needs to be taken in order to grow double digit organically (currently low single digit and we model 6.7% next three years) requires increased investments in R&D, which could be better to take off the stock exchange (short-term hit on margins). The company has trailing 12m OpFCF margins of +20% and is net cash with NOK116m, which is a very good starting point for leverage. Assuming 10x EV/EBITDA (20% premium) in both entry and exit multiple, 6.9% revenue CAGR, 31.8% average EBITDA margin, 22% tax-rate, 5% interest rate, 10% D&A (due to amortization of acquired companies), 7.5% capex/sales and 24% working capital to sales, we arrive at 2.9x MoM multiple looking towards 2027 and 23.4% IRR.


Therefore, we upgrade Mintra from Neutral to Buy and increase our target from NOK3.6 to NOK5. On our NOK5 target, the company trades at 2023 EV/EBITDA of 9x and 8.6% OpFCF yield, which still looks cheap. The main reason we do not set our target higher – i.e., give the company credit with higher multiples, is the current low single-digit organic growth. If the company, given their exposure to the energy sector, is able to also increase its organic growth – we see further upside on multiples.

Clarksons note on OCean GeoLoop partnership with Chevron

Ocean GeoLoop (OCEAN NO, NOK 28.98, Buy, PT: NOK 40.00)

Chevron invests in OGL at 28% premium
Ocean Geoloop announced this morning that oil giant Chevron has acquired shares in the company for the first time through a primary offering at a price of NOK 37/share, representing a 28% premium to yesterday’s close. The rare listed investment by Chevron appears to be a major vote of confidence in the commercial viability of OGL’s technologies, which is the key to the stock’s ultimate value potential, in our view. The investment follows a successful start-up of the OGL’s pilot plant and its first capture of carbon, with a more formal “proof of concept” expected to be achieved later this year after 3000 hours of testing. We have a Buy rating and NOK 40 Target Price on Ocean Geoloop based on a probability-weighted value analysis, though as we outlined in our coverage initation  several scenarios exist in which upside potential could exceed our Target Price, depending on commercial success of the company’s technologies.

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.

After the strongest quarter ever in Q1, Mintra reported another strong Q2 beat. Below is a summary of the broker reports.

I wrote here about the investment case a few weeks ago. http://www.fitinvestmentideas.com/2022/07/15/mintra-smart-play-on-shipping-and-energy-exploration-boom/

We are long Mintra.

Pareto Securities Report

Q2 EBIT 34% ahead of expectations
Mintra reports Q2 EBITDA of NOK 24m (22% ahead of PAS est.), EBIT of 18m (34% ahead of PAS) and FCF of 7m (ahead of PAS at 1m). The main reason for the beat is related to lower-than-expected cost, partly explained by improved revenue mix towards higher margin services (eLearning up, Consultancy down). The order intake also continued to grow, up 8% y/y to NOK 39m, and should convert to revenue growth over the coming quarters, which has been moderate so far this year (Q2’22 revenues up 1% y/y). Looking at valuation, it’s difficult to find a lower priced tech stock in the Nordics – so far this year (H1), Mintra has already generated ~8% of its EV and on run-rate multiples it’s priced at 6x EV/EBITDA and 8x EV/EBIT. We believe growth will pick up over the coming quarters and combined with stellar profitability, this is a stock to own in our view. Buy reiterated TP – 7.0 NOK

SpareBank Report

Mintra (2Q22 report): Earlier today, MNTR delivered its 2Q22 figures where we are interested in the 1) organic growth, 2) deviations on OpFCF and 3) any comments in the outlook with regards to signs of pent-up demand within energy in particular. Following the report, trailing 12m EBITDA margin stand at 29%, which is what we model for the full year and hence, we are likely to increase our estimates some 5-10% and look into our current Neutral recommendation. The organic growth is not impressive (low single digit), but given the 2023 double digit OpFCF yield valuation on the current share price and its new owners, we see it as a potential public to private candidate that at least has solid margins (trailing 12m OpFCF margin of 22%).

Revenues landed at NOK62.6m, which was 5% above our NOK59.9m estimate. That correspond to a organic growth of 1%, a sequential decline from the organic growth of 3% in 1Q21.


With the operational scalability in its business model (e-learning and software primarily), OpFCF landed at NOK21.3m, which also was above our NOK16m estimate, driven by both lower than expected opex (lower opex in 2Q vs. 1Q due to holiday pay in Norway), but also lower capex, which landed at 4.4% to sales. If the company intends to grow double-digit, we believe below 5% capex to sales is a too low level and as such, we put more emphasis to the beat on EBITDA, which came in at NOK24m vs. our NOK21m estimate.


Limited hard facts where given in the outlook section, but we note that the beat on EBITDA was not related to changes in gross margin (87%) and hence, related to recurring opex improvements (to right size the company towards its low single digit organic growth). We also note that reporting will be changed from quarterly to a six month basis. Coupled with the fact that the company is net cash of NOK115.5m, trades at 2023e EV/EBITDA of 6.7x and an OpFCF yield of 11.2% on our current estimates with Ferd as the largest owner – we see MNTR as a highly potential public to private candidate.

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.

We are long Sedana Medical a pioneer medtech and pharmaceutical company dedicated to making inhaled sedation a standard therapy in ICU (Intensive Care Unit). The company was the beneficiary in Covid, and a victim of post Covid sell off. We bought in believe that post Covid sell off was excessive. It is a smaller position for us now, in review now for potential position increase. More details on the company http://www.sedanamedical.com

Redeye Research Summary on Sedana Medical

Q2: Continues to build a base for wider roll-out

Redeye lowers its full-year sales estimates for 2022E from SEK 180m to SEK 149m and our 2023-2024E sales by 4-8%, following the report. Once the market normalizes (the company hopes for early 2023), we believe Sedaconda will be more widely implemented in ICUs and its long-term potential will be better recognised by investors. We reiterate our fair
value range, consisting of a SEK 101 Base Case.

Q2 2022 in brief
Sales in the quarter of SEK 26.9m (39.5) were 35% below our expected SEK 41.1m and 32% lower than in Q2 2021. The sales figures can be explained by a drop in ventilated ICU patients (c40-50% compared to Q2 2021, according to Sedana Medical). We had higher expectations for the roll-out of on-label Sedaconda in the quarter. However, we believe sales could jump aggressively in Q4 2022E as national approvals (specifically the UK with
its NICE guidelines) and reimbursements should be in place.

On the cost side, OPEX amounted to SEK -48.7m (-42.6) compared to our SEK -48.2m estimate and none of the line items were particularly off from our projections. As we go forward, we anticipate improvements in administrative costs as the company implements its cost-cutting program.
Some estimate changes, but the fair value range is intact

We have downed our FY 2022E estimates from SEK 180m to SEK 149m (-17%), but as we believe 2023E will offer an entirely different playing field (i.e., national approvals, reimbursements, and guidelines), our sales estimate changes are small for the coming years. For 2023E, we lower by 8%; for 2024E, we lower by 4%; for 2025E, we lower by a mere 1% and we still expect Sedana Medical to reach its sales target of SEK 500m by that year.
Our fair value range is intact and consists of a SEK 101 Base Case, a SEK 21 Bear Case and SEK 149 Bull Case.

Link to Redeye free research:

Click to access sedana-q222-review-update-final-publish1.pdf

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.

Every month Pareto Securities publishes their portfolio ideas for Norway and Sweden. They select ten stocks for each market. Below is our selection from that portfolio. Their Norwegian portfolio ideas outperformed the benchmark by 30%, Swedish portfolio by about 1%. I selected below the ideas we like most from the 20 stocks.

We also published our Top Ideas for August last week. Link is below.

Our Top Ideas for Q3

Ideas selected from Pareto Monthly Portfolio Update for August for Norway and Sweden

HAFNI – BUY, TP NOK 45
Product tanker rates are going through the roof as the Ukraine war is sending much-needed diesel volumes long-haul while inventories are running dangerously low. Hafnia’s Q2 bookings put them at run-rate P/E ~2.5x as MRs just finished their best quarter since Q4’04. Q3 is starting out on a higher note than Q2 did and bookings from peers suggest Q3 EPS of USD 0.7 for runrate P/E 1.2x in HAFNI. Consensus is nowhere near this and we believe the Q2 report later in August will be an eye-opener, with Q3 earnings alone set to dwarf the mayhem we saw during 2020. Our current NAV of NOK 39 is pushed to NOK 50 by YE’22 on our estimates with values up 10%. Momentum and underlying markets are firming under the radar as refinery runs are set to increase, and Hafnia is perfectly positioned with a large and healthy levered fleet. BUY / TP NOK 60

AKH – BUY, TP NOK 30
We estimate Aker Horizons mark-to-market SOTP at NOK 27/share, which implies that it trades at a 36% discount. We find this attractive for a company that has proven its ability to create value by actively managing its portfolio and securing strong partnerships to drive further growth. In addition, Horizons has materially strengthened its investment capacity that now exceed
NOK 10bn of cash equity (incl. MRP). We think this is underappreciated by the market and a differentiator to many peers. BUY / TP NOK 30

Calliditas Therapeutics – Buy, TP SEK 300
In July, Calliditas Therapeutics received European approval for its first-to-market drug Nefecon in the rare kidney disease IgA Nephropathy – which came one month earlier than expected. The drug will be sold under the brand
name Kinpeygo by Calliditas’ partner STADA, a large German Pharma company. Calliditas has already launched the drug (brand name Tarpeyo) in the US and noted a continued acceleration of sales in the Q1 call for April and first half of May. In the coming months, we expect the stock to continue outperforming the market, especially towards the Q2 call in August.

Vicore Pharma – Buy, TP SEK 97
VICO is trading +100% YTD and is poised to continue much further in the coming two months. Why? We expect (positive) major catalysts around end of August / early September. These include follow-up data from the company’s trial in idiopathic pulmonary fibrosis (IPF) patients and also the readout of the COVID-19 phase 3 study. Drug sales in IPF reached around USD 4 bn last year, comprised of two drugs, one from Roche (Esbriet) and one from Boehringer Ingelheim (Ofev). Despite the two drugs on the market, the median survival after diagnosis is 3-5 years (the drugs are only slowing the decline in lung function). Vicore’s drug, for the first time ever, has shown gain in lung functions in IPF patients that reached the hundreds of millilitres / instead of short-term stabilization or slower decline as competitors. The efficacy demonstrated by Vicore’s drug in the February 2022 readout drug showed a
lung function gain of +251mL at week 24 & +751 mL at week 36 – unprecedented and we believe this will soon be further reinforced.

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.

This morning, Quantafuel announced that they have signed a FEED agreement with DUBAL Holding and BASF for chemical recycling of waste plastics in Dubai. The project, consisting  of an 80,000 tons per year facility, moves into the FEED stage after a six-month feasibility study, with a potential FID date targeted for early next year. Positive to see progress and that BASF is involved.

As a reminder, the company next reports at the end of this month, which has historically represented a sizeable trigger for the share price.

Pareto Securities Comment

QFUEL – Quantafuel just announced that the announced pipeline project in Dubai has completed its feasibility study and is moving forward with FEED towards FID. An eventual FID for the project is scheduled for early 2023. We have assumed that the Dubai project would come on stream during Q1’25, and given a construction timeline of 18-24 months, an FID in early 2023 gives comfort to our estimates. The size of the plastic-to-liquid plant will be 80,000 tons per year, in line with our estimate assumptions. The size is four times that of Skive, underpinning that Quantafuel’s ambitious growth plans are on track. TP NOK 19, BUY

Arctic Securities Comment

Quantafuel ASA: Signs FEED agreement for plastic recycling in Dubai

Quantafuel announced today that an agreement with DUBAL Holding and BASF has been signed for the FEED stage on the plant for chemical recycling of waste plastics in Dubai. BASF will act as a partner, sharing the costs of the FEED stage while Saipem has been chosen as the service provider. The FEED for the development will be done in 2022 with a potential expected final investment decision made early 2023.

Nordea Securities Comment

Quantafuel – FEED agreement signed for plastic recycling in Dubai

This morning, Quantafuel announced that they have signed a FEED agreement with DUBAL Holding and BASF for chemical recycling of waste plastics in Dubai. The project, consisting  of an 80,000 tons per year facility, moves into the FEED stage after a six-month feasibility study, with a potential FID date targeted for early next year. We see this latest news as a positive step for Quantafuel, which represents progress on the chemical recycling side of things (which is where Quantafuel’s proprietary technology lies) and could result in a share price uplift today. The company also notes that this project could represent pole position in the company’s project portfolio (an FID in early 2023 implies potential first oil in 2024). Whilst positive, we do highlight that production ramp-up at Skive this year should be a key focus point, with a successful ramp-up showing robustness of the company’s technology over a period of time. Furthermore, we note that in order to unlock their facility rollout we anticipate the company requiring a return to the capital markets (H1 2023 in our model). As a reminder, the company next reports at the end of this month, which has historically represented a sizeable trigger for the share price.

ABG Sundal Collier Comment

QFUEL (B): Progress in Dubai – BASF gets involved

Quantafuel (B) just announced that the plastic recycling plant in Dubai has entered the FEED (front end engineering and design) phase after site and feedstock has been secured, and a  six month feasibility study has been concluded. In addition to its local partners, BASF has joined. Final investment decision is targeted for early ’23 and the capacity is set at 80.000 tonnes per year. Saipem has been chosen as FEED service provider and is a likely candidate in our view for the EPC scope. It is positive to see progress in this project which can lead to several more plants down the road, and we consider it positive that BASF is now part of this consortium.

Sparebank comment

Quantafuel – QFUEL, Dubal Holding and BASF has kicked off the FEED (front-end engineering and design) phase for the 80.000 tpd plastic recycling plant in Dubai. Expected FID early ’23 as site and feedstock has been secured. Saipem has been chosen as EPC contractor. Positive to see progress and that BASF is involved.

OUr top ideas for Q3 published yesterday

Our Top Ideas for Q3

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.

We enclose our top ideas for Q3. I wrote her before about many of those and include links to the investment rationale.

Biovica – FDA approved first biomarker test in cancer area

On Monday Biovica reported FDA approval for its unique breast cancer test. The stock went up only by 30%. The current market cap is only around 80 million USD. Very low for the first biomarker test in cancer area. There are plenty catalysts shortly. Strong takeover candidate. See the links for details.

Biovica International Should Double On Novel Breast Cancer Test Launch In Q3 | Seeking Alpha

Broker Comments on Biovica Received FDA Approval for First Ever Biomarker in its Field – Fit Investment Ideas

Mintra – high beta play on shipping and energy exploration growth.

Mintra reported best Q in Q1. Pareto believes Q2 should be even better. Q2 is due on 11/8. Mintra is profitable, growing strongly, healthy cash flow generation, no debt and it is still one of the cheapest vs Scandinavian peers. Doubling candidate for this year.

Mintra: Smart Play On Shipping And Energy Exploration Boom – Fit Investment Ideas

Cool Company (LNG Tankers)

Russia war against Ukraine results in gas shortage. EU wants to buy gas from elsewhere. LNG tankers should be the beneficiary. Cool Company was recently listed in Norway, US listing is due in 2H22. Should appreciate strongly this year.

ABG Sundal Collier on Cool Company: Best Exposure to Appreciating LNG Spot Rates – Fit Investment Ideas

Pyrum Innovations – global leader in tire recycling

Pyrum Innovations: Co-Invest With BASF And Continental | Seeking Alpha

Pyrum – global leader in chemical recycling of tires announces construction of its third plant – Fit Investment Ideas

Africa Energy – one of the few energy stocks that has been raising even in the recent weeks

Major catalysts expected this quarter. See below for details.

Pareto: Africa Energy – Stars aligning & Significant news flow ahead – Fit Investment Ideas

Linkfire

A global leader in servicing streaming companies. +70% market share, +70% gross margin, 50-70% revenue growth. Top 10 IPO from Denmark. Unjustifiably punished by the growth stock sell off.

Linkfire: A Unique Play On Music Streaming Through Market Leader Growing At 50%+ CAGR | Seeking Alpha

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.