{"id":289,"date":"2021-05-10T01:00:00","date_gmt":"2021-05-10T01:00:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=289"},"modified":"2021-05-06T08:57:44","modified_gmt":"2021-05-06T08:57:44","slug":"renergen-fy-21-nearing-phase-one-derisking-phase-two","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=289","title":{"rendered":"Renergen &#8211; FY 21 &#8211; Nearing Phase One &#038; Derisking Phase Two"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Share Code: REN \u2013 Market Cap: R2.7 \u2013 PE: -65.2x \u2013 DY: 0.0%<\/strong><\/p>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/05\/Renergen_Results-Note_FY-21.pdf\">Download full Renergen FY 21 Results Note<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/05\/Renergen_Results-Note_FY-21.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>FY 21 Results: Smaller than Expected Preproduction Loss<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Renergen\u2019s operating loss was smaller than expected despite a small revenue miss as lost production (due to the lockdown) was offset costs.<\/li><li>The Group spent R125.7m on assets under construction, capitalized R21.5m intangible assets and made a second draw down on its US International Development Finance Corporation (DCF) loan to the tune of $12.5m. The Group\u2019s short-term unencumbered cash reserves sit at R130m.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Progress Updates: Almost Entire Positive<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The Group has concluded a partnership with Total SA as LNG distribution is set up down the key N1 route.<\/li><li>Drilling of P007 &amp; MDR1 both reflect strong resource, flow &amp; helium concentration data, highlighting potentially better-quality resources and\/or lower capex intensity of Phase Two.<\/li><li>The Group has concluded its first helium sales agreement with a global tier-one automotive supplier for Phase Two.<\/li><li>Finally, The Group\u2019s innovative cold chain storage solution (Cryo-Vacc\u2122) made its first sale, moving post-revenue.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Forecast, Valuation and Implied Return: Appears Undervalued<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Since our Initiation, our major assumptions remain the same, albeit we have updated our model for the latest spot prices that, in general, have moved in Renergen\u2019s favour.<\/li><li>Our DCF-driven sum-of-the-parts (SOTP) valuation for Renergen implies Phase One &amp; Two\u2014offset by central costs, debt and (potential) dilution\u2014are worth 4149cps (previously 3539cps). After options for Evander and Cryo-Vacc are added, we see Renergen\u2019s share as potentially worth 4978cps (previously 4247cps).<\/li><li>Rolled-forward by CoE, our 12m TP is 5850cps (previously 4977cps) or over double what the current share price is.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/05\/Renergen_Results-Note_FY-21.pdf\">Download full Renergen FY 21 Results Note<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/05\/Renergen_Results-Note_FY-21.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Refer to our <a href=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=258\" data-type=\"post\" data-id=\"258\" target=\"_blank\" rel=\"noreferrer noopener\">Initiation of Coverage<\/a> for more background on this stock.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: REN \u2013 Market Cap: R2.7 \u2013 PE: -65.2x \u2013 DY: 0.0% FY 21 Results: Smaller than Expected Preproduction Loss Renergen\u2019s operating loss was smaller than expected despite a small revenue miss as lost production (due to the lockdown) was offset costs. The Group spent R125.7m on assets under construction, capitalized R21.5m intangible assets [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[100],"tags":[127,103,15,105,101,19,93,48],"class_list":["post-289","post","type-post","status-publish","format-standard","hentry","category-renergen-ren","tag-gas","tag-helium","tag-jse","tag-lng","tag-renergen","tag-research-report","tag-stock","tag-valuation"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=289"}],"version-history":[{"count":1,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/289\/revisions"}],"predecessor-version":[{"id":291,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/289\/revisions\/291"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}