Classification of GBC AG to dynaCERT Inc.

Scaling Clean Tech Opportunities

dynaCERT Inc. is a Canadian cleantech firm dedicated to developing innovative emission-reduction technologies, specifically targeting internal combustion engines. The company’s primary technology, HydraGEN™, leverages a proprietary electrolysis process to produce on-demand hydrogen and oxygen gases, enhancing combustion efficiency, improving fuel economy, and significantly reducing greenhouse gas emissions. dynaCERT serves diverse sectors including transportation, mining, oil & gas, construction, forestry, and power generation. The company's solutions are complemented by the HydraLytica™ telematics platform, facilitating data-driven fuel savings and carbon credit monetization.

Historically, dynaCERT has faced challenges generating sustainable revenue streams, resulting in significant operational losses. The company reported revenues declining from CAD 1.15 million in FY2022 to CAD 0.45 million in FY2023 due to slower customer adoption, economic uncertainty, and prolonged regulatory approval processes. Despite these past revenue fluctuations, recent financial results indicate a potential turnaround, driven by increased product acceptance and accelerated sales momentum demonstrated over the first nine months of 2024.

As of September 30, 2024, dynaCERT exhibited financial constraints, notably a negative shareholders' equity of CAD -0.39 million. Liquidity also remains a concern, evidenced by a substantial decrease in cash and cash equivalents. Despite these hurdles, the company has actively improved working capital management and significantly reduced total liabilities. dynaCERT’s liquidity position has been bolstered by recent financing activities, including private placements totaling CAD 6 million, enhancing its capacity to scale operations and drive growth initiatives faster and more efficiently.

dynaCERT's financial outlook shows robust potential, underpinned by growing global interest in carbon reduction technologies and regulatory mandates pushing emissions compliance. Revenues are projected to scale significantly, from an estimated CAD 2.40 million in FY2024 to CAD 21.00 million by FY2026, driven primarily by increasing unit sales, software subscriptions, and adoption within key sectors like transportation and energy. Earnings are expected to progressively improve, transitioning from continued losses in 2024 to profitability by FY2026, with a net profit forecast of CAD 5.77 million. This turnaround reflects improved production efficiencies, better pricing strategies, and economies of scale as operations expand globally.

Based on our DCF model and key market assumptions, dynaCERT's stock is valued at CAD 0.75 (0.48 EUR) per share, significantly above its current trading price of CAD 0.15, highlighting considerable upside potential. This valuation reflects anticipated revenue acceleration, improving margins, and strategic positioning within the rapidly expanding cleantech and hydrogen economies. Given these compelling factors and the robust projected growth trajectory, the stock receives a 'BUY' rating, offering investors attractive exposure to global environmental trends, regulatory tailwinds, and the growing carbon credit market.