East Coast Research Altech Valuation Inches Higher as Analyst Firm adds CERENERGY to Model

Description

Australian analyst firm East Coast Research has updated its valuation for Altech Batteries (ASX:ATC,FRA:A3Y) to a slightly higher range, as it added Altech’s CERENERGY batteries project to its model.

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In the initiation report from February 15, 2024, the company was valued at AU$0.15 per share in the base case and AU$0.21 per share in the bull case, based solely on the DCF valuation of Altech's Silumina AnodesTM Project. The addition of CERENERGY to the valuation model upgraded the valuation to range from AU$0.16 per share in the base case to AU$0.22 per share in the bull case.

“The observed marginal impact on our per-share target valuation range stems largely from Altech's ownership stake in the CERENERGY project being less than 60 percent and the fact that Fraunhofer's 25 percent stake in the project is free-carried, thus not contributing to project development costs. Our DCF model is broadly based on the assumptions of Silumina Anodes DFS and CERENERGY Battery DFS results and net of minority interests in both projects,” the East Coast Research Report stated.

Pilot manufacturing plant Fraunhofer Hermsdorf

The key risks to the investment thesis, the report noted, include uptake, competition, exchange rate and funding risks.

Highlights of the report include:

• Altech Batteries has completed a definitive feasibility study for its CERENERGY Batteries Project, revealing robust project economics and a pre-tax net present value (NPV9) of €169 million.
• The company is actively engaged in the funding process for the CERENERGY Battery plant, with favorable prospects due to the project's alignment with Europe's commitment to renewable energy transition.
• Altech has signed non-disclosure agreements with major utility conglomerates in Germany, indicating strong interest in its CERENERGY 1 MWh GridPack batteries.

For the full analyst report, click here.

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