The Phoenix

hank10
RECSI 07.01.2021 kl 18:40 19179

Shares fully diluted(m): 372.4
Shareprice (NOK): 18.0
M.cap (musd): 791
NIBD (musd): 82
EV (musd): 873




THE CASE: TRANSITIONING TO A BATTERY PLAY COULD IMPLY 5X UPSIDE!

After years of challenges due to the solar trade war between the US and China, REC Silicon is positioned to turn around the battery industry and become the leading provider of silane gas to the producers of silicon anodes for battery application. A market that is set to grow exponentially as EV manufactures and battery producers scramble to increase efficiency and longevity while at the same time as cutting costs and weight. Some customers of REC today (Sila Nano and Group 14) have managed to overcome this issue by replacing anodes in Lithium-Ion batteries made from graphite carbon with silicon. This improves energy density as silicon can store 10x lithium vs carbon. High purity Silane is the most efficient way of making silicon anodes.

REC is the only producer of silane gas in Europe and USA and has a capacity of 7.000 MT in Butte and 25.000 MT in Moses Lake = 32.000 MT total. Their current production at Butte of around 3k mt gives them a global market share of 70%. Their total capacity can supply 1m electric vehicles. This radically improves the earnings of a company which historically has had the same capacity linked to the oversupplied solar polysilicon market, as the silane gas was used as input in the manufacturing of solar grade polysilicon.

Silangas prices today is around 25 dollars and REC Silicon has a cash cost less than 10 dollars - with its capacity of 32k MT Silan. Assuming, similar 25 USD of prices today we are looking at EBITDA (100% capacity) of 480 MUSD. This comes from already installed capacity (REC has already fully financed the reopenening of Moses Lake). Applying a conservative multiple of 10x EBITDA (100% silan capacity) you get 108 NOK a share (only Moses Lake and Butte).


Bloomberg New Energy Finance (BNEF) estimate a sale of 8.5m EVs in 2025 and 26m a year by 2030. The anodes will probably not entirely be converted to silicon anodes by 2025 but the potential should at least be pretty obvious.











BACKGROUND

REC Silicon is the world’s largest producer of silane gas with its current production out of Butte Montana. Butte, currently has 70% global market share in the silane gas market. In addition to Butte, REC will have a an additional 25k MT capacity per year of silane gas at Moses Lake when it is reopened. Silanegas is the principal material used in the production of polysilicon, and is an essential input material for thin film PV, semiconductors and LCD display manufacturing. REC Silicon also has the world’s largest silane gas ISO module container fleet and is a world leader in other silicon gases - dichlorosilane (DCS), monochlorosilane (MCS), disilane and polysilanes.

The patented, closed-loop silane manufacturing process used by REC Silicon produces consistent, ultra pure silane by conversion of metallurgical grade silicon into trichlorosilane and redistribution/ distillation to silane. The continuous-flow process recycles all hydrogen and chloride materials back to the initial reactors, while continuous distillation steps purify the gas. The entire process is a low waste, low impact and environmentally friendly procedure.


After being in distress for several years as a result of the US-China solar trade war, REC announced two transformational partnerships in October 2020. These two partnerships will enable REC to reopen Moses Lake sometimes during 2022 and maybe as early as end 2021.

Just after announcing the new partnerships, Pareto and Arctic Securities secured appr. 1 billion NOK to recapitalise the company and enable it to restart it Moses Lake operations. The cornerstone investor in this deal was reputable industrial conglomerate Aker ASA (Kjell Inge Røkke) who increased their stake with 300 mnok at nok 10.80 per share, taking their ownership to 24.7%. Aker had earlier in 2020 bought the entire stake from a distressed owner, making Aker the biggest shareholder.

REC has announced that these two partnerships give the Moses Lake facility sufficient production level and visibility for reopening Moses Lake. They have guided for 75% capacity utilization at Moses Lake for 2023 with an EBITDA of 100 musd. In addition to this, they will have 30-50 musd EBITDA at the Butte plant. Adjusted for SG&A, REC will have an EBITDA of around 130musd in 2023 growing to 200 musd (estimate by Pareto) in 2025.


The two partnerships secures the business case until 2025, but at some point in the near future you will see the demand after silane skyrocketing. Bloomberg New Energy Finance (BNEF) estimate a sale of 8.5m EVs in 2025 and 26m a year by 2030. The anodes will probably not entirely be converted to silicon anodes by 2025. Obviously, the need to expand REC’s production capacity will become a theme sooner rather than later, as the demand for silane for the EV battery market grows rapidly. Existing Moses Lake facilities have had an historical cap ex of 1.7 bnUSD, which is close to the current replacement cost today. This translates to a value of 38 NOK a share.

This will probably lead to a capacity expansion. An expansion will make investors value the existing facilities above its replacement cost, and will look to future earnings and growth.
The case stated above is dependent on the presumption that silicon anodes will make its way into batteries, replacing graphite anodes. Here are some reasons why its likely.


SILICON BASED ANODES FOR LITHIUM BATTERIES

To get a deeper understanding of this its strongly recommended to read the white paper of Sila Nanotechnologies written by Gene Berdichevsky, CEO (no7 employee in Tesla) and CTO, Gleb Yushin.


https://silanano.com/wp-content/uploads/2020/09/The-Future-of-Energy-Storage.pdf

Sila Nanotechnologies will produce silicon anodes for batteries, starting with consumer electronics (rumored to happen in 2021) and then expanding to EVs.

They claim that enhancing the Lithium-ion battery is the only path forward in the foreseeable future (read: next decades) and that battery cost and performance is holding back mass adoption of EVs. Daimler invested 170 musd in the Sila Nanotechnologies early 2019 (1 bn USD valuation) to be a part of the making of next generation Lithium battery.

Here are some other links to articles about Lithium-ion batteries

https://www.bloomberg.com/news/articles/2019-04-03/battery-reality-there-s-nothing-better-than-lithium-ion-coming-soon

…and here more specific on the team and background from Sila Nano

https://www.inc.com/magazine/201904/jeff-bercovici/sila-nanotechnologies-silicon-lithium-ion-battery.html



Unknown to most in the global capital markets and the public in general, Sila Nano is currently a customer of REC Silicon (for smaller quantities of silane gas for Sila’s test production) , but could prove to become a big customer in the future if only fractions of Sila’s predictions come through.

Here is an interview by CNN of the CEO, Gene Berdichevsky.

https://silanano.com//wp-content/uploads/2020/01/gene-berdichevsky-cnni-16-jan-2020-6Mz.mp4

THE MAIN CHALLENGE WITH SILICON ANODES IS GETTING SOLVED

Anodes in Lithium-ion batteries today is made of graphite. So by replacing some or all of the graphite with silicon, the energy density of the battery is significantly improved (silicon can store 10x the quantity of lithium compared to graphite) reduce weight and cost, unlocks the cathode capacity in the battery (will come back to this) resulting in faster charging and much better longevity.

The main challenge has been that silicon anodes expands up to 3x during charging and then decrease to 1/3 with de-charging. This has broken the battery structure (the surface called SEI) so it will limit the number of charging cycles.

Both Sila Nano and Group14 claim they have fully or partly overcome this huge issue. This is done by packaging the anode inside a material that make the surface not break down during charging and de-charging.

Tesla endorsed silicon as the anode material of the future at their battery day in September 2020. Tesla are already using silicon oxides in their Panasonic battery, and is planning to use metallurgical silicon in the next phase of development. You might say this is a natural path towards next generation silicon anodes. Here is an article from Barrons exploring this with reference to REC customer Group14.

https://www.barrons.com/articles/ev-battery-cathodes-are-getting-better-dont-forget-about-the-anodes-51603105205

There is strong arguments for why next generation batteries for EVs will be using silicon as the main anode material. The use will gradually start to ramp up from 2023, and probably start to accelerate at some point after this.

Let’s go back to the white paper of Sila. They see a growth in the production of batteries from 20 Gwh pre the “EV-era” to 2000 Gwh by 2030 (when they expect about 100mill EVs on the road). This is expected to grow toto 30.000 Gwh by 2050. These figures for demand for battery capacity corresponds to the demand for 2-4 mill tonnes of silicon! Note that Sila expects solid state batteries to mainly be used for some niches areas, and thatsolid state batteries will be irrelevant in the battery market revolution.

Looking only to EV market, we can say something about the size of the market by looking at how much silicone or silane you would need per anode. Numbers range from 30 to 50 kg and its uncertain if this refers to silane or silicon. But if it is silicon the silane numbers are higher (1.4x). If we remember the estimated number of EVs sold per year in 2025 and 2030 (8.5 mill and 26 mill) you get demand figures for silane in 2025 (if this is already 100 percent adopted) between 255.000 and 425.000 metric tonnes. In 2030 the corresponding numbers will be 780.000 mt and 1.300.000 mt. T
Redigert 21.01.2021 kl 05:43 Du må logge inn for å svare
Kjellefant
13.02.2021 kl 19:02 8374

Hvis du et ekspert på batterier så må du utdype dette mere? Meget tynt å bare slenge ut denne kommentaren. Samlokasjon vil klart få ned kostnader.
Slettet bruker
13.02.2021 kl 21:52 8012

Hvis en vil leke litt med tall og hvordan fremtiden ser ut i REC. La oss si i ett blue sky scenario, der alle spådommer slår til. ML åpner med etterspørsel til å forsvare full kapasitet. Samtidig besluttes det å øke kapasiteten i Butte. Hvor mye Butte planlegges å øke vet vi ikke, men la oss si kapasiteten økes fra 7500MT til 12000MT.
Dette avgjøres iløpet av de neste 6mnd. Hva vil kursen ligge på mot slutten av året da? Ved kurs 116,- vil selskapet verdsettes omtrent på nivå med NEL(44 mrd).
Hvis en så tenker noen år frem i tid, flere fabrikker planlegges og vi har kanskje sett økning i kapasiteten i ML. Kanskje også fabrikk i Norge eller Europa.(Gjelsten må jo ha råstoff til sin batterifabrikk, Morrow batteries.) Hva kan potensialet bli? Ved kurs 200,- vil selskapet verdsettes omtrent til det Aker BP er idag(76 mrd).
Og hvis alt klaffer og dette blir fasiten, hva er sjansen for at dette skjer uten utvanning pga. rettede emisjoner eller annet fjas?
Dette er bare en lek med tall og setter pris på andre sine tanker om potensiell utvikling.
Redigert 13.02.2021 kl 21:56 Du må logge inn for å svare
Oljearbeiidern
14.02.2021 kl 07:39 7614

Time will tell.
Aker BP er en gigant, det skal MYE til før Rec Silicon er der. Vi må nok ta stegene først.

Er det for eksempel 100% sikkert at Silisiumgass vil kunne bli brukt i Anodene til Sila? Og hvorfor er REC en selvfølge?
Rubin
14.02.2021 kl 21:02 7172

Nok en spennende uke i RECSI venter på oss, men nå også med en masse kursdrivende nyheter...🙂
Slettet bruker
14.02.2021 kl 21:22 7084

Nå kjenner jeg ikke noe særlig til oljebransjen men et raskt søk viser at Aker BP hadde produksjonstall på 139 000 fat/dag i 2017 og 156 000 fat/dag i 2019. Til sammenligning ligger Statoil på 1,3 millioner fat/dag og de største selskapene i verden på godt over 4 millioner fat/dag. Da synes jeg det blir litt rart å omtale Aker BP som noen gigant. Husk at REC kommer til å produsere innsatsfaktoren i det som kommer til å bli den nye energirevolusjonen. Det er mye penger i dette. En kurs mellom 100-300 innen noen år ser jeg selv på som høyst mulig.
Redigert 14.02.2021 kl 21:24 Du må logge inn for å svare
Slettet bruker
14.02.2021 kl 22:16 6891

Ja potensialet kan være enormt. Og noe er definitivt i gjære.
Slettet bruker
16.02.2021 kl 12:07 6448

TRIGGERS:

- Violet power website goes online SEMI COMPLETED: http://staging.redirectdigital.com/violetpower/about

- Violet power to announce products and start of production

- Group 14 first delivery to consumer electronics customer Q1 2021

- Group 14 IPO

- Phase 1 trade deal US-China implemented and 57% tariffs dropped

- Restart of ML announced. 9 months of commissioningand the plan is to be in production Q2 2022

- Ingot and wafer solution in the US (1366 technologies)

- Improvements and increased margins at Butte

- Yulin reactor liner back in place (supply interrupted due to Corona) and ramp up of FBR-B electronic/mono grade

- Biden to win majority in Georgia senate election January 5th COMPLETED

- FBR official considered next gen polysilicon technology. (GCL trying to ramp up)

- Xinjiang polysilicon (25% of global capacity) is banned from US/EU markets

- New partnerships or customers to ML announced

- REC Incorporated in Aker Horizon portfolio COMPLETED

- Insiders buying/increasing number of shares

- OBX hovedindeksen
Slettet bruker
27.02.2021 kl 17:32 6005

Slutt å diskuter Grove. La oss gå videre

Minner om denne triggerlisten og når ting etterhvert kan begynne å materialisere seg.
Hvis Sila skal være "up and running" med fabrikk i 2024, er det vel å forvente at det snart annonseres hvor denne skal bygges.
Slettet bruker
27.02.2021 kl 19:59 5799

"Sila Nano has started the site selection process within North America, with plans to announce a location by the end of the year." - Craig Weich, Sila Nanotechnologies, e-post til meg datert 27.01. 2021
Slettet bruker
27.02.2021 kl 20:03 5767

Vet vi hvem Sila Nano sine kunder er? Om de finnes? Mener å huske at de sa at i tillegg til å ligge nær feks RECSI så må de også ligge nær feks en bilprodusent (om det er kunden dems). Og det er vel ingen bilprodusenter i nærheten av ML?
Rubin
27.02.2021 kl 20:39 5587

Sila N. og Group14 må ha tilgang til Silicon og Silane gas for å lage Silicon anodene. Gassen er svært dyr å transportere så de må legge sine fabrikker svært nær en Silicon/Silane produsent slik at de kan transportere den via rør. Da må de til ML og RECSI...🙂
Ferdige anoder kan sendes til batterifabrikker/ bilfabrikker hvor som helst i verden...
Redigert 27.02.2021 kl 21:18 Du må logge inn for å svare
Slettet bruker
27.02.2021 kl 20:41 5576

Tror ikke det er noe stort problem å shippe bilbatterier rundt? Det er silanet som er problemet.

Daimler (Mercedes, Smart) er blant investorene i Sila. https://silanano.com/news/daimler-teams-up-with-sila-nanotechnologies-on-next-generation-lithium-ion-battery-materials/
Redigert 27.02.2021 kl 20:44 Du må logge inn for å svare
Slettet bruker
27.02.2021 kl 20:48 5533

Nemlig. Jeg trodde Sila skulle bygge komplette batterier på fabrikken, men jeg ser nå at det bare er anodene. Det er gull, blir mye mer silan pr kvadratmeter da!
Slettet bruker
27.02.2021 kl 20:53 5485

Thx. Finnes noen lignende fabrikker fra før som Sila N må bygge? Tenker da mest på om vi vet hvor lang tid det tar...
G14 er de i gang med byggingen? Og er det samme fabrikk evt Sila N må bygge?

Den ene triggeren til trådstarter er: Group 14 first delivery to consumer electronics customer Q1 2021
Betyr det at ML går på «tomgang» (ifølge TT) og lager noe til G14?
Redigert 27.02.2021 kl 20:59 Du må logge inn for å svare
Slettet bruker
26.03.2021 kl 19:46 4608


- Violet power website goes online COMPLETED

- Violet power to announce products and start of production

- Group 14 first delivery to consumer electronics customer Q1 2021

- Group 14 IPO

- Phase 1 trade deal US-China implemented and 57% tariffs dropped

- Restart of ML announced. 9 months of commissioningand the plan is to be in production Q2 2022

- Ingot and wafer solution in the US (1366 technologies)

- Improvements and increased margins at Butte

- Yulin reactor liner back in place (supply interrupted due to Corona) and ramp up of FBR-B electronic/mono grade

- Biden to win majority in Georgia senate election January 5th COMPLETED

- FBR official considered next gen polysilicon technology. (GCL trying to ramp up)

- Xinjiang polysilicon (25% of global capacity) is banned from US/EU markets

- New partnerships or customers to ML announced

- REC Incorporated in Aker Horizon portfolio COMPLETED

- Insiders buying/increasing number of shares

- OBX hovedindeksen COMPLETED

- President Joe Biden to present 4 trillion dollars "Build Back Plan" in Pittsburg 31.03.21. And how to upgrade infrastructure, both physical and technological infrastructure.
Slettet bruker
26.03.2021 kl 20:07 4473

Her var det mye bra og vel flere ønsker !. Bl.a. Kilde til "Restart of ML announced. 9 months of commissioningand the plan is to be in production Q2 2022" ?
Ærligtalt
26.03.2021 kl 21:20 4139

Vel, det kommer i så tilfelle ikke som noen bombe om de er i full produksjon allerede Q2 2022... Altså om ca. 1 år

Tror faktisk ikke at det kommer som en overraskelse på noen her inne med lengre fartstid en en måned eller to i dette papiret?
Slettet bruker
26.03.2021 kl 21:25 4094

Om man lurer på når ML starter opp så foreslår jeg at man søker på en av jobbene og spør om når du skal møte opp til første arbeidsdag :)
Slettet bruker
26.03.2021 kl 22:04 3853

Tror jeg har hørt eller lest en plass at det tar omtrent 9 måneder å fyre opp ML.
Men triggerlisten er forsåvidt bare copy/paste fra en eldre tråd på forumet og husker ikke lengre hvor jeg fant den eller hvem som skrev den opprinnelig. Så har jeg prøvd å lagt til nyere hendelser som kan være potensielle triggere.
Syns det er greit å ha som en reminder.
Sandsli invest
26.03.2021 kl 22:32 3675

Når det lyses ut jobber i ML for oppstart da er det påtide å kjøpe, når det skjer..... Q2 2023 er nå min mening for det er mye som skal avklares, settes istand og avtales. Sitter på RECsi aksjer som jeg ikke fikk solgt for 23 i februar, de har jeg i skuffen enn sålenge. KIR kunne vært mer informativ ang RECSI.
Slettet bruker
27.03.2021 kl 07:17 3085

Hvis det utlyses jobber. Vi vet ikke hvilke avtaler om evt. retur Rec har med de som måtte gå da fabrikken stengte. Uansett vet Rec hvem tidligere ansatte er og kan ta direkte kontakt, eller motsatt, at tidligere ansatte tar kontakt for retur.
omac
27.03.2021 kl 09:03 2803

Ja for de støver ned på ett loft i påvente at REC skulle starte opp, nei de er nok long gone
Slettet bruker
27.03.2021 kl 09:35 2656

Spørs hva du mener med støv og long gone. Ser det er ansatte i andre virksomheter i nærområdet med lang fartstid i Rec på CV-en, og som ble ansatt i 2019 da fabrikken stengte. De følger nok med hvis de lengter tilbake, og trenger neppe søke på en annonse.
Slettet bruker
27.03.2021 kl 14:01 2280

Nå har jo ikke Corona vært spesielt gunstig for arbeidsmarkedet, ei heller i USA så med gode prospekter til framtidig drift i uoverskuelig framtid er det my som taler for at mange kan komme tilbake. Det er vel også ganske bra betalte jobber dette.
Slettet bruker
08.12.2021 kl 09:43 1245

The Phoenix!!

Les førsteposten!! Legg til alt det vi har fått vite, Hanwha Solutions og vær litt visjonær. At denne handles for under 20,- fortsatt er en gavepakke til alle aksjonærer som har satt seg inn inn caset. REC skal tydeligvis produsere for både solarmarkedet og batterimarkedet i Moses Lake.

"This will probably lead to a capacity expansion. An expansion will make investors value the existing facilities above its replacement cost, and will look to future earnings and growth."