EQTEC – Initiation of Coverage

Well positioned both financially and operationally to grow substantially in the waste-to-energy market

EQTEC provides engineering and design services and sells its EQTEC Gasifier Technology (EGT) to waste-to-energy operators and enterprise partners. The company works together with multiple parties involved in W2E projects including the developers, waste owners, building contractors and funders with a view to ultimately providing its gasification technology, associated engineering & design services and O&M services.

  • Efficient and reliable technology with a strong track record

    Unlike many operators in the gasification market, EQTEC has already proven the economic viability of its technology and seen many years of it operating in a commercial environment. Flagship project the Movialsa plant in Spain has seen over 90,000 hours of commercial operations since 2011.

  • Large pipeline of opportunities provide near-term revenue potential

    EQTEC currently has a large pipeline of projects across the UK, Europe and US, with total capex values ranging from €10 million to €100 million. An operations update in April confirmed that the company has recently seen a “significant increase” in the level of international interest in EGT. This follows the signing of an equipment purchase contract with US power company Phoenix Energy, the first such contract signed under EQTEC’s Growth Optimisation Plan.

  • Debt facilities provide funding for growth

    EQTEC has two debt facilities in place. A Combined Secured Loan Facility with Altair Group has recently been increased by £0.879 million to £3.5 million. Additionally, the company has a $10 million secured facility with Cuart Investments Fund. These provide substantial financial resources to use on executing pipeline opportunities and for working capital.

  • Waste and energy market drivers put the company in a sweet spot

    EQTEC’s technology and services lie in a sweet spot, providing a solution to dealing with problems associated with two of the world’s most pressing issues – rising levels of waste (and how to manage it) and growing demand for energy. Research Nester forecasts that the global waste-to-energy will grow at a CAGR of 5.7% to 2024 to reach a value of $42.52 billion.

  • Valuation suggests 171% upside with further long-term potential

    Based on our forecasts and using a peer derived EV/EBITDA multiple we set an end 2020 target price for the shares of 2.293p. With this implying 171% upside, we initiate coverage of EQTEC with a stance of Conviction Buy.


    EQTEC is a research client of Align Research. Align Research own shares in EQTEC. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

Table: financial overview
Year to Dec 2019E 2020E 2021E
Revenues (€m) 13.8 74.85 123.27
Pre-tax (€m) (0.2) 10.2 18.8
EPS (cents) (0.01) 0.34 0.58
Source: Align Research