Company: Char Technologies Ltd
Listing: TSX Venture, US OTC
Tickers: $YES.V / $CTRNF
Market cap: 42.34 MCAD at time of publication
Share price: 0.60 CAD at time of publication
Website: https://www.chartechnologies.com/
Comparable peers:
Xebec, $XBC Market cap $642 MCAD
Greenlane renewables, $GRN, Mcap $210 MCAD
We are pleased to see Char Tech announce a test project with Hitachi Zosen Inova (HZI) to develop a high temperature pyrolysis to green hydrogen system at their existing San Luis Obispo (SLO) anaerobic digestion facility in California. Under the definitive agreement with HZI’s SLO operating company, CHAR’s high temperature pyrolysis system will process 18,000 tonnes per year of solid anaerobic digestate into 1,320 tonnes of green hydrogen per year, and 2,800 tonnes per year of biocarbon. The project will be delivered under a BOOT (build-own-operate-transfer) model, where CHAR will be the initial project owner, with HZI managing system operations. While CHAR owns the assets, CHAR will receive revenues directly for the project outputs (green hydrogen and biocarbon). Upon executing the transfer, at their option, HZI’s subsidiary will purchase the project for a one-time payment. Ongoing project output revenues will be dispersed based on a predefined agreement.
ESG comment: We are very excited to see the first commercial breakthrough order of a Char Technologies pyrolysis system to an end client.
Char technologies are certainly delivering on their 100 million USD backlog! Hitachi Zosen Inova is a global cleantech company operating in energy from waste (EfW) and renewable gas. The corporate group has a turnover of close to 4 billion USD annually. We estimate that this test project deal will generate project revenues of 560 000 USD for the biocarbon and between 4-6.6 MUSD for the green hydrogen annually. All in all the project revenues for operating the plant for the operator would likely equal 4,56 -7,2 MUSD annually. We estimate that the final sales value of this test project once it’s transferred from Char Technologies to Hitachi Zosen Inova will be approximately 5 million USD . We think that this lower sales price will likely be applied since this is a first test project and if successful Hitachi Zosen Inova most likely would want to implement this technology at their 100 plants globally . Instead of putting their waste material into landfills Hitachi Zosen Inova can actually use it to create substantial revenues with this pyrolysis system from Char technologies. The financials of the system are so economically appealing that we think Char Technologies will have little trouble executing on their backlog and also continue growing their sales pipeline.
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