Eqtec (EQT)

This company sound really interesting - think the basic idea is to convert waste into energy, got to be a good thing moving forward? https://eqtecplc.com/

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Totally agree

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can anyone add any more insight into this company, received this email from Freetrade just now:

“It’s been a big month for Eqtec.

Last week the waste-to-energy firm signed an exclusivity agreement to buy land for a gasification and power plant project.

And it was a happy blend of festive joy and relief for investors, who had already seen the accord pushed back three times.

David Columbo, chief exec of the sustainable energy outfit said, “The project would convert 200,000 tonnes per year of non-recyclable everyday household and commercial waste otherwise destined for landfill or incineration.”

It’s the second bit of good news this month after the Cork-based company agreed to take on full ownership of the Deeside Refuse Derived Fuel project in Wales.

The deals add to broadly positive momentum in the firm’s shares this year. Shares are up over 9x in 2020 and around 250% in the past month.“

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This looks like a company with forward thinking with plenty of scope going forward . i think worth investing long term . £0.0254 share got to be worth it .

what you think ?

Funnily enough a friend asked me to look into this earlier in the week :sweat_smile:

Here was my rough notes to him:

Good:

  • Well positioned in a growing market
  • Actively looking to grow based on acquisitions
  • Growing revenue in 2020
  • Operating loss isn’t too worrying
  • Small debt levels (less than £1M)
  • Nice SP trend of late
  • Compared to other UK ‘green companies’ you could argue their valuation isn’t too high (Ceres Power/ITM)

Bad:

  • Insider ownership is much lower than expected which worries me (i.e. the board and shareholders incentives are not aligned)
  • It’s appears slightly overbought in the short term sell off based on technicals (but that doesn’t mean it will happen)
  • SP has been flat or negative for years before the recent upwards movement, this implies unimpressive growth and they may just been rising purely because they are a ‘green company’
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Interested that your assessment is that it is a growing market - any particular reason for that?

The reason I ask is that there has been a lot of competition in the waste sector over the last 10 years and a lot of relatively new plants built in that period. I haven’t followed the state of the municipal waste market so much recently so I don’t know if there is much growth but I wouldn’t have thought so.

On the industrial waste side of things there is a lot of competition (and the UK probably does need more capacity) but I’m pretty sceptical that gasification is the solution as I’ve written about previously on the Powerhouse thread. The technical and economic challenges for gasification are pretty difficult to overcome particularly if you’re only using the gasified to make syngas (and not hydrogen or chemical feedstock constituents eg monomers).

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For the six months ended 30 June 2020, EQTEC PLC revenues decreased 51% to EUR 770k

Source from EQTEC website:

Outlook for the rest of 2020 and 2021 looks promising according to the company’s forward looking statement but time will tell:

Outlook

• Pipeline health continuing through H2 2020 with 14 non-contracted tender opportunities worth a total potential contract value of €66 million, with a forecast of 13 new commercial offers and seven exclusivity contracts in H2 2020.

• Of over 40 opportunities and projects in our pipeline at end of H1 2020, more than half are expected to receive development capital from EQTEC as well as our partners. The acceleration is expected to drive us to closing deals more rapidly and deepening our partnerships.

Just based on desktop research, articles like below.

https://www.fortunebusinessinsights.com/gasification-market-103487

The global gasification market size was valued at USD 479.13 billion in 2019 and is projected to reach USD 901.51 billion by 2027, exhibiting a CAGR of 8.4% during the forecast period (2020-2027).

I haven’t read the thread you mentioned (maybe I’ll send the link to my friend :thinking:), I’m sure it’s not the perfect solution as you alude to.

Why is this stock only for plus members? It’s a little annoying.