Sparebank1 Markets med ny analyse i dag - "Case significantly de-risked, target upped to 200"

Et utdrag:

We reiterate our Buy recommendation on QFUEL and increase our target price to NOK200 from NOK50 per share. Over the last month, the investment case has been significantly de- risked with 1) the first plant commencing production in Denmark, 2) the output quality being well within the expected range for BASF, and 3) QFUEL has raised c.NOK850m (c.USD95m) in two private placements resulting in a strong balance sheet. Going forward, the investment case will be all about growth, as we estimate that each new facility will have a very attractive ROE of >100% and a payback time of two years (USD100m capex and at least USD50m EBITDA). QFUEL targets to have 6 facilities in operation by 2023, and if we assume 50% ownership, the current share price of NOK66 is equivalent to a P/E of 6.4x. We find QFUEL highly attractive given the company’s rapid growth opportunities with sound economy, proprietary technology, ESG profile and three world class strategic partners.
• Growth at highly attractive plant economics – Two years payback time Together with Vitol, world’s largest oil trader, QFUEL has already commenced feasibility studies of two large scale facilities (100,000t plastic waste per year) in Antwerp and Amsterdam, and QFUEL aims to have 6 facilities in operation by 2023. We estimate that a plant cost approximately USD100m, and contributes with an EBITDA above USD50m, resulting in a highly attractive payback time of less than two years. If we take it one step further and assume 60% debt financing at 5% interest, the estimated net profit of c.USD40m gives an unparalleled ROE above 100%.
• QFUEL in a few years – P/E below 10x
QFUEL will probably grow for many years, and for example its strategic partner BASF consume naphtha every year equivalent to more than 2,000 times the estimated production capacity in Skive. Investing in just a fraction of those plants could give a value above NOK1,000 per share, but let’s focus on the short- to medium-term for now. Thus, we assume that QFUEL reach its target to have 6 facilities in production by 2023 at the abovementioned economics. Then QFUEL is estimated to have an EBITDA of NOK1.9bn and net profit of c.NOK1.3bn (EPS of NOK10), resulting in a highly attractive EV/EBITDA of 5.6x and P/E of 6.4x on the current share price of NOK66.
• Valuation – TP NOK200 equivalent to a P/E of 20x
Our target priced of NOK200 per share is equivalent to a P/E of 20x once the first 6 facilities are operational, if we assume 50% ownership. The valuation range in QFUEL is wide given the strong growth opportunities, but we argue that it all breaks down to one thing: if you believe QFUEL will reach anything close to estimated production figures, the current share price is a highly attractive Buying opportunity.