{"id":352,"date":"2022-03-15T02:20:00","date_gmt":"2022-03-15T02:20:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=352"},"modified":"2022-03-14T14:25:38","modified_gmt":"2022-03-14T14:25:38","slug":"renergen-strategic-partner-invests-with-tailwinds","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=352","title":{"rendered":"Renergen \u2013 Strategic Partner Invests with Tailwinds"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Share Code: REN \u2013 Market Cap: R4.9bn \u2013 PE: -115x \u2013 DY: 0.0%<\/strong><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-0224dea9-a646-4f32-ab85-40a02572d9f7\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_15-March-2022.pdf\">Renergen &#8211; Update &#8211; 15 March 2022<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_15-March-2022.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-0224dea9-a646-4f32-ab85-40a02572d9f7\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>News: Helium &amp; LNG more valuable, Ivanhoe Mines invests<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Helium market update<\/strong>: Supply challenges from BLM, Qatar &amp; Amur all limit helium availability as SpaceX &amp; the semiconductor industry ramps up demand, implying large helium spot upside.<\/li><li><strong>LNG market update<\/strong>: The oil price rally should drive domestic fuel prices (further) upwards. Reasons for the rally are both sticky and bode well for Renergen\u2019s LNG revenues (tied to diesel &amp;\/or CPI).<\/li><li><strong>Ivanhoe Mines \u201cstrategic partnership\u201d<\/strong>: In a <em>momentous<\/em> moment for Renergen, Ivanhoe Mines has invested into the Group (an initial 4.35%-stake) with a roadmap to potentially ramp this investment up to a maximum of either 55% or $250m of capital.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: Renergen\u2019s Potential Upside is Growing Quickly<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The tailwinds lifting Renergen\u2019s underlying gas resource keep driving its fair value upwards. While the LNG revenue should track domestic fuel prices &amp; CPI upwards, the helium revenue (even the revenue locked into the long-term supply contracts) holds immense upside potential too.<\/li><li>The latter may see wild card renegotiation clauses being triggered and repricing in the increasingly tight global helium market.<\/li><li>The investment by Ivanhoe Mines is a vote of confidence in the Group and, depending on how\/if Ivanhoe Mines takes up their options to further invest, may underpin the (equity) funding for (a much <em>larger<\/em>!) Phase II that further derisks the Group.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation and Implied Return: Plenty of Room\u2026<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Despite keeping our helium basket price flat<em> and <\/em>a stronger Rand exchange rate, we upgrade our fair value to 5821cps (previously: 5747cps) &amp; 12m TP to 6867cps (previously: 6766cps).<\/li><li>Given the commodity pricing dynamics, there is considerable upside risk to this valuation from both LNG &amp; repricing helium closer to spot, not to mention any Rand-weakness.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-0ae0d133-41ae-401c-9a94-08fc80b61869\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_15-March-2022.pdf\">Renergen &#8211; Update &#8211; 15 March 2022<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_15-March-2022.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-0ae0d133-41ae-401c-9a94-08fc80b61869\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: REN \u2013 Market Cap: R4.9bn \u2013 PE: -115x \u2013 DY: 0.0% News: Helium &amp; LNG more valuable, Ivanhoe Mines invests Helium market update: Supply challenges from BLM, Qatar &amp; Amur all limit helium availability as SpaceX &amp; the semiconductor industry ramps up demand, implying large helium spot upside. LNG market update: The oil [&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":[13,101,60,20,30],"class_list":["post-352","post","type-post","status-publish","format-standard","hentry","category-renergen-ren","tag-equity-research","tag-renergen","tag-research","tag-small-cap","tag-small-caps"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/352","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=352"}],"version-history":[{"count":1,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/352\/revisions"}],"predecessor-version":[{"id":354,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/352\/revisions\/354"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}