Company: Absolicon
Ticker: $ABSL
LIST: Spotlight Sweden
MCAP: $33 MUSD at time of publication
Share price: 136 SEK = 16 USD at time of publication
Industry: solar thermal heating/ district heating
Market size: $223 billion$ by 2026
Bullside Target: 400 SEK[1]
[1] https://www.aktiespararna.se/sites/default/files/absolicon_q4_2020.pdf
A crucial fact often neglected by investors and decision makers globally is that 50 % of the worlds energy consumption consists of heat for buildings, homes and other facilities.[1]
Absolicon has invented a patented cost effective solution that uses sunpower to create heat and works like a giant magnifying glass . It has 76 % optical efficiency which currently is the highest in the world.
Absolicon’s business model has two main revenue streams:
1.Sell production lines to local distributors (each costs ~ $5 MUSD
2.Reoccurring additional revenues selling patented materials (between $2-5 MUSD annually per production line) and also royalty fees (4%) on products made by distributor.
The company has three main markets as focus:
1.Factories for heat consumption
2.Destillation of water
3. District heating
Why should one consider investing in Absolicon now?
-Absolicon has seen the flow of customer requests increase exponentially due to the green wave in USA and Europe .
-13 frame works agreements done today compared to 3 in March 2020 .
-Each of these agreements are worth potentially $10MUSD plus reoccurring revenues. [1]
-Absolicons concentrating solar collector will be able to compete with natural gas prices
-As stated in the introduction Heat is about half the world’s energy consumption. Electricity is only 20 % of the worlds power usage , heat And transport is 31 % .The industrial sector uses about 1/3 of the heat power consumption globally and this is what Absolicon helps with .
– Absolicon has multiple large corporations in ongoing customer discussions as indicated in the picture below:
These are Absolicons conservative Goals for 2022 :
-Turnover of $12 MUSD (equals 2 production lines)
-Positive cash flow from selling production lines
– Listing at the main Nasdaq market in Sweden
Patent protection:
The company has Patent on materials (glass reflector and pipes ) and on tools for mass production and Can therefore not be compared to regular solar panels
It also has:
-Reflector film with high reflection and low price
-Anti reflective glass with self cleaning surface
-Receiver that does not release heat
Patent situation
10 different Patents
Utility models
Design protection
Trademark protection
Absolicon has also recently initiated a cooperation with Swedish export credit which allows Absolicon to sell their customers equipment and materials on credit They can also sell complete sun catcher fields on credit . This is exceptionally favourable since the Swedish government backs this financing.[2]
Background on District heating / solar heating
Europe today has 6000 heat grids that uses coal gas and oil. The European Union has promised to quit using fossil fuels and what is at hand is mostly solar heating.
Half of Swedens buildings are run on district heating which can be replaced by Absolicon . France has 50-70 % investment support for solar heating and Germany has 20 cities that already has installed sun driven heat . Absolicons system gives 50 % more heat than traditional solar thermal systems at higher temperatures.
Project with Municipalities
Absolicon has made an application to the Swedish energy authorities (energi myndigheten ) and in December 2020 they started building Sweden’s largest heat field for sun catchers 3000 square meters with an annual production of 1000 MWH. Both the energy minister and director of the energy ministry of Sweden participated in the ritual. This field is close to the corporate head quarters of Absolicon and can easily be used for customer demonstrations. Half of Sweden’s homes are heated with district heating. According to SNF, an environmental NGO, 20% of the heat can be replaced by solar thermal (8 TWh). Below you will find an image of the heat field project which broke ground in december 2020. This project could be the main catalyst to gain more customers within municipalities.
Conclusion
Absolicon’s latest financing was early 2020 with the goal to open new markets and they’ve so far been able to finalize 12 new framework agreements in 9 months to customers who wants to mass produce their product . The company has ongoing discussions with major corporations globally and it looks like its only a matter of time before several of their framework agreements materialise into real orders. I believe the delay in the conversion of these framework deals can partly be accredited to COVID-19 delays. Local distributors will likely want to build up their own order book before placing their actual order on the Absolicon system.
Absolicon has a patented and unique solution which can be used for Distric heating, water distillation and Factories for heat consumption .
As far as I’ve been able to identify Absolicon appears to have the best in class product on the market with the absolute highest optical efficiency at 76 %. The potential order value of the current frame work agreements signed with distributors amount to one time revenues of $65MUSD and annual reoccurring revenues between $39-$65MUSD. I also believe Absolicon also has a massive potential to sell their system directly to municipalities who want to use their system for district heating, they also have ongoing direct discussions with major corporations globally. With the green wave in Europe and USA it appears the future for Absolicon is very bright!
I own shares personally in this company .
This is not to be considered financial advice, always do your own research!
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[1] Calculated as $5 MUSD one time fee and $5 MUSD reoccurring revenues.
[2] https://www.svenskverkstad.se/solenergiforetaget-absolicon-visar-goda-resultat
[1] https://www.iea.org/reports/renewables-2019/heat and https://vimeo.com/392939877
