AIM listed PowerHouse Energy (PHE) is a waste-to-hydrogen business focusing on the development and commercialisation of its proprietary Ultra High Temperature Gasification technology.
G3-UHt system – PowerHouse’s flagship, DMG, is a disruptive technology
PowerHouse’s Distributed Modular Gasification (DMG) G3-UHt system can convert high calorific value waste material such as tyres, plastic & hazardous waste, into a clean synthesis gas. This “syngas” contains a high percentage of hydrogen that can be cleaned up to 99.9995% purity using off-the-shelf technology to produce a road quality hydrogen fuel. This will be branded as “DMG-H2”. DMG allows for distributed electrical generation, distributed waste elimination, and distributed hydrogen production.
A third, previously under-developed, method of hydrogen production
PowerHouse’s ultra high temperature gasification technology has numerous ecological and economic advantages over other hydrogen production methods such as steam methane reformation (SMR) and electrolysis. It can produce a high quality, low cost, low carbon product – a feat previously unachievable by any other waste conversion processes.
Targetting the UK & overseas hydrogen markets
Having refined its technology significantly PowerHouse is developing a G3-UHt prototype into a fully operational commercial unit capable of processing 25 tonnes per day of waste. Near term, the company will deliver electrical generation, however, the intention is to take advantage of opportunities in the hydrogen fuel industry, both in the UK and overseas.
A unique and first to market process that potentially unlocks the Fuel Cell Vehicle (FCV) market
The G3-UHt system has the potential to reduce the cost per mile of a hydrogen car significantly lower than a petrol or electric car with a zero, arguably negative, carbon footprint. This puts the company in an excellent position to take advantage of growth in the FCV market.
DCF valuation suggests 324% upside potential
Our DCF analysis suggests a net NPV of £52.75 million, or 4.24p per share, 324% above the current share price of 1p. But, using what we consider to be conservative assumptions, we see significant further potential upside. We initiate coverage of PowerHouse Energy with a Conviction Buy stance.
PowerHouse Energy is a research client of Align Research. Align Research owns shares in PowerHouse Energy. 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.
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|Pre-tax profit (£m)||(0.68)||(2.55)||(0.78)||(1.33)|