EQTEC – Valuation Update

Further commercial progress and financial strengthening prompts forecasts update

EQTEC provides engineering and design services and sells its EQTEC Advanced Gasification Technology 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 advanced gasification technology, associated engineering & design services and O&M services.

  • Further significant commercial progress in H1 2020

    Since our last update on the company at the end of March, EQTEC has announced further operational and commercial progress on a range of projects across the UK, US and Europe. In addition, 10 new commercial enquiries were received by EQTEC in Q1/early Q2 2020 and full detailed commercial offers, with an aggregate potential sales value of c.€120 million, were made during the period.

  • Financial position strengthened via debt re-profiling, warrant exercise & placing

    On 1st June, EQTEC announced the re-profiling of its debt facilities with lenders Altair and Riverfort. Existing loans plus interest totalling €2.7 million had their maturity extended from 31st July 2020 to 30th June 2021, with interest rates reduced from 12.5% to 10%. Also in June, a total of £964,750 was received by the company via the exercise of certain warrants. Further, in July, EQTEC raised £10 million via a placing and subscription.

  • Further progress prompts forecasts review

    Given the commercial progress being made and increased pipeline of opportunities we have revisited our forecasts for the years 2020 to 2022. At the top line we expect revenues to grow markedly over the forecast period as EQTEC delivers on its project pipeline. Net profits are forecast at €5.3 million in 2021, rising to €8.6 million in 2022. We consider a multiple of 15 times earnings to be a justifiable figure to use for our valuation, which applied to our 2022 forecasts and discounted back to end June 2020 at a rate of 12% derives a price per share of 1.39p.

  • Peer analysis supports valuation

    Applying the average London listed alternative energy sector peer group enterprise value to EQTEC implies a market cap of £88.08 million, or 1.282p per share. We thus update coverage of EQTEC with an increased target price of 1.39p based on our earnings valuation and retain our stance of Conviction Buy.


    EQTEC is a research client of Align Research. Align Research owns 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 2020E 2021E 2022E
Revenues (€m) 6.96 38.49 65.99
Pre-tax (€) (0.93) 5.33 10.76
EPS (p) (0.0149) 0.0683 0.1103
Source: Align Research