Here is the second instalment in our series on selected listed companies operating in the clean and green space, produced as a contribution by research and analyst company Kalkine. The series has been devised in recognition that in the absence of government mandates one of the fastest and most efficient ways to transition to a clean economy is through investments that promote a clean and healthy economy. However, as with any investment there needs to be a solid business case and a critical eye to underwrite success. The Fifth Estate makes no comment on this.
This second article in our investment series covers three companies from different geographical areas in the clean technology sector that are showing signs of encouraging results. With innovation-driven and viable product platforms, support from investors and promises made for clean energy, we see a lot of developments under way.
- See the third article here, Investment analyst series: algae, US and Indian clean energy
- and the first, The investment analyst series: Greenearth Energy and Eden Innovations
Infigen Energy Ltd
Company details: Infigen Energy Ltd (ASX: IFN) is a developer, owner and operator of renewable energy generation in Australia with six wind farms and a solar farm. Infigen’s development pipeline comprises about 1100 megawatts of large-scale wind and solar projects spread across five states in Australia.
The company reported that the change in federal government leadership in September 2015, and the subsequent combination of energy and environment portfolios, has led to the better integration of the government’s energy and climate change policies. The rerate of large scale certificate (LGC) prices has been sustained. This has led to further investments being made in the industry.
Moreover, Australia’s commitment to the global climate goal [made in Paris] was expected to lead the government to consider emission reduction policies in 2017, which would be beneficial to IFN, the company says. However, it should be to the discretion of the investors to assess the government’s probable move on introducing an emissions intensity scheme in accordance with Infigen’s prospects.
Financial and strategic details: Infigen has sold its US-based assets for $100 million and used these proceeds to repay its debt. During the financial year of 2016 (FY16), the company’s debt declined by $56.5 million.
IFN has also achieved a net operating cash flow from continuing operation of $56.9 million, up by 71 per cent for FY16. FY16 profit after tax was $4.5 million against the loss of $284.5 million. For first quarter of FY17, IFN reported an 11 per cent and 56 per cent rise in production and revenue, respectively.
Stock details: IFN has been added to S&P/ASX All Australian 200 Index effective 16 December 2016. After generating returns of about 92.1 per cent this year to date, the stock corrected by more than 26.2 per cent in the last six months (as of 8 December 2016). The stock is a “Speculative Buy” at the current price.
7C Solarparken AG
Company details: 7C Solarparken AG (ETR: HRPK) is a German company engaged in the design, manufacture and operation of solar power plants, and has a key objective to built-up capacity growth from 94 MWp to 115 MWp for its solar asset portfolio.
Financial details: The company reported a splendid 20 per cent growth in revenues to €26.5 million for the nine months ending at FY16 while the liquidity position was enhanced by 13 per cent to €31 million against the corresponding period of last year.
The company further planned to make technical improvement to add €0.2 million to earnings. Closing of a strategic deal in 2018 is expected to bring a transition from a Tier 3 to Tier 2 player. The company has started an optimisation plan in third quarter of 2016 for achieving the increased annual earnings, and aims to finish this by first-half end of 2017.
Stock details: The company is planning a convertible bond issue of €2.5 million for existing shareholders. The stock price has slipped 11.8 per cent in last three months (as at 8 December 2016) but we believe that the stock is trading at slightly high levels.
Company details: UK-based Econic Technologies is a university spinoff and a growing catalyst technology company in polymer science. The company commercialises novel catalyst technologies to transform waste carbon dioxide (CO2) into polyols (alcohol containing multiple hydroxyl groups and sometimes also referred to as sugar alcohols) for polymer synthesis to make a new generation of everyday use plastics (such as cars, mattresses, etc.)
Technology details: Econic’s technology uses a unique range of catalysts (a patent-protected family of homogeneous organometallic catalysts) and offers a great blend of environmental and economic benefits, allowing manufacturers to replace up to 40 per cent of their petrochemical feedstocks with low-cost captured CO2. Primarily, Econic’s catalysts help in reducing the amount of activation energy needed for polymer production, and suitably do this by activating the waste CO2 for co-polymerisation with epoxides (small organic molecules typically derived from petroleum, and can react with less reactive molecules such as CO2). This approach aims to contribute to greener economy as it reduces the use of fossil fuel chemicals for polymer production and relies on a more valuable carbon feedstock.
Investment details: In 2016, Econic Technologies raised £5 million from Imperial Innovations Group, Woodford Investment Management and JetStream Capital to develop novel catalyst technology.
With the latest funding, Imperial Innovations Group’s holding in Econic Technologies is understood to have increased to 53.7 per cent. Since inception in 2011, Econic raised nearly £13 million in investments. This can be a great play going forward if the company can achieve the milestones as planned and show growth prospects.
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