Algae.Tec (ASX: ASX: AEB, FWB: GZA:GR, ALGXY:US) is the subject of a research report from New York based Arrowhead, which believes that Algae.Tec has "enormous growth potential with a medium risk profile."
Based on intrinsic revenue capacity from 500 modules, the research firm has estimated that the company’s fair share value lies in the AU$1.51 to AU$2.15 bracket.
Arrowhead has updated its 'Due Diligence and Valuation Report' on Algae.Tec which is an advanced biofuels company commercialising high-yield algae growth technology to manufacture sustainable fuels such as bio diesel and green jet fuel.
Market Data
52-Week Range: AU$0.17 to AU$0.67 per share
Average Daily Volume: 32,496
Market Cap. on date: A$81.81 million
Summary
Algae.Tec Limited is involved in the production of algae to manufacture sustainable fuels such as biodiesel and green jet fuel. Management has core competencies in biofuel technologies, energy markets, project commercialization and business management.
The company has successfully demonstrated the algae oil and biomass yield in the experimental stages. The company is now building a demonstration facility with Malindra to prove its commercial viability, which is expected to be completed in Q1-2012.
Algae.Tec is in the process of establishing strategic partnerships and alliances with investors, venture partners, customers and suppliers to accelerate achievement of the company’s goals and objectives.
In addition, the company has recently set up the 18,200 square foot Algae Development & Manufacturing Centre in Atlanta where the photo-bioreactors will be assembled for shipping around the world.
Algae.Tec tapped into international capital markets with a public offer and listed on the Australian Stock Exchange and Frankfurt Stock Exchange.
On 28thApril 2011, the company’s American Depositary Receipts (ADR) commenced trading on the USA OTC market under the ticker ALGXY.
Algae.Tec has developed the McConchie-Stroud System which cultivates and economically harvests high yield algae. The system is scalable, has minimal land footprint and water usage.
The technology provides competitive advantages in terms of low capital and operating costs, minimal requirement of land, low water evaporation and better recycling of water amongst other specifics which make it commercially viable.
The global market for algae is poised for explosive growth in the next 10 years, demand is expected to reach 61MM gallons/year of bio-fuel and a market value of AU$1.3B by 2020 representing a CAGR of 72%, roughly on par with early development in the biodiesel industry.
Globally, the United States (US) is poised to ramp up production the earliest among world markets with 50% of all algae activity. The European Union, accounting for about 30% of algae activity, will be limited initially by the industry’s focus on university research, and later by insufficient access to water, land, and nutrient sources.
It is believed that the US and Europe cannot grow enough corn, soy, or rapeseed to meet their biofuel targets. Latin America and Asia Pacific, which have fewer projects in operation today, are set to gain significant market share in the long run.
Arrowhead believes that Algae.Tec has enormous growth potential with a medium risk profile.
Based on intrinsic revenue capacity from 500 modules, Arrowhead believes that the company’s fair share value lies in the AU$1.51 to AU$2.15 bracket.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/19403/algaetec-arrowhead-places-a151-to-a215-share-price-valuation-19403.html
Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London.
No comments:
Post a Comment