{"id":400,"date":"2022-11-07T01:01:00","date_gmt":"2022-11-07T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=400"},"modified":"2022-11-06T09:56:46","modified_gmt":"2022-11-06T09:56:46","slug":"renergen-h123-results-share-price-disconnected-from-underlying","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=400","title":{"rendered":"Renergen \u2013 H1:23 Results \u2013 Share Price Disconnected from Underlying"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: REN \u2013 Market Cap: R3.7bn \u2013 PE: -105x \u2013 DY: 0.0%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-82da4db5-28f8-47f6-b8d7-a03e2aaf8152\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/11\/Renergen_Results-Note_7-November-2022.pdf\"><strong>Renergen &#8211; H1:23 Results Note<\/strong><\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/11\/Renergen_Results-Note_7-November-2022.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-82da4db5-28f8-47f6-b8d7-a03e2aaf8152\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:23 Results: Delayed but moving swiftly forward<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Renergen&#8217;s revenue was flat at R1.2m and the Group reported a loss of -19.31cps (H1:21 -21.05cps) as it neared production status.<\/li>\n\n\n\n<li>Phase One is moments from producing gas and, although delayed against the original timeframe, this will be an exciting moment as the Group transitions from a developer to a producer.<\/li>\n\n\n\n<li>Phase Two funding is progressing well, having issued shares to Ivanhoe Mines (though the larger equity deal expired), the CEF has agreed to inject R1bn into the Project, &amp; various blue chip debt funders have expressed interest in funding up to $1.2bn of debt for the project.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: Enviable Position<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>While Phase One delays are disappointing, the underlying fundamentals and attractive economics of the Virginia Gas Project remain and are further highlighted by the interest in funding Phase Two.<\/li>\n\n\n\n<li>The conclusion of the well-priced CEF R1bn equity investment is a strong positive and, we believe, the expiry of the Ivanhoe equity deal is a net positive by avoiding expensive dilution.<\/li>\n\n\n\n<li>Furthermore, the large pool of interested debt funders into Phase Two means that Renergen has both time to find the appropriate equity funding <em>and<\/em> the flexibility to pick terms.<\/li>\n\n\n\n<li>All in all, we believe that Renergen is in an enviable position for a developer as it transitions into a fully-fledged gas producer.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation and Implied Return: Share Price Disconnected from Value<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>We see Renergen\u2019s fair value at c.6700cps (previously: 6337cps) and 12m TP c. 8000cps (previously: 7491cps).<\/li>\n\n\n\n<li>With a range of fair values from c.5000cps to c.6700cps (CEF deal implies c.6600cps for REN shares), what is clear is that REN\u2019s share price deviates substantially from even the low-end of this range.<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-82da4db5-28f8-47f6-b8d7-a03e2aaf8152\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/11\/Renergen_Results-Note_7-November-2022.pdf\"><strong>Renergen &#8211; H1:23 Results Note<\/strong><\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/11\/Renergen_Results-Note_7-November-2022.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-82da4db5-28f8-47f6-b8d7-a03e2aaf8152\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: REN \u2013 Market Cap: R3.7bn \u2013 PE: -105x \u2013 DY: 0.0% H1:23 Results: Delayed but moving swiftly forward Our Thoughts: Enviable Position Valuation and Implied Return: Share Price Disconnected from Value<\/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":[13,101,60,16],"class_list":["post-400","post","type-post","status-publish","format-standard","hentry","category-renergen-ren","tag-equity-research","tag-renergen","tag-research","tag-south-africa"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/400","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=400"}],"version-history":[{"count":5,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/400\/revisions"}],"predecessor-version":[{"id":409,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/400\/revisions\/409"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}