Original-Research: A.H.T. Syngas Technology N.V. - from GBC AG

Classification of GBC AG to A.H.T. Syngas Technology N.V.

Company Name: A.H.T. Syngas Technology N.V. ISIN: NL0010872388

Reason for the research: Research study (initial coverage) Recommendation: BUY
Target price: 37,50 EUR
Target price on sight of: 31.12.2024
Last rating change:
Analyst: Marcel Schaffer, Cosmin Filker

- Growth strategy to become a multinational CleanTec and clean energy providers
- Financial year 2023 successfully concluded with record sales, record earnings and a promising backlog according to preliminary figures  
AHT Syngas Technology N.V. (AHT) is a global company that develops technologies for converting carbon-based fuels into synthesis gas. The company focuses on the development, system integration and sale of decentralized power plants and gas purification systems. AHT's range of services includes, for example, compact/biomass power plants, hot gas systems for purely industrial heat applications, clean gas systems for decentralized power generation plants as well as project planning, project management and maintenance services. The AHT plants are designed to convert carbonaceous fuels such as biomass, wood, waste and coal into synthesis gas. The synthesis gas can be used as a feedstock for various applications such as power generation, heat generation and the production of chemicals and fuels.
 
In recent financial years, AHT has further developed its technology and made useful additions through acquisitions. With the acquisition of FHT Hydrogen Separations GmbH, the production of hydrogen will also be an integral part of AHT's plants in future. Know-how in the field of biomass processing is pooled in the subsidiary aremtech GmbH. This will create the basis for supplying the company's own plants and at the same time lay the foundations for the future trade and sale of processed biogenic materials. Thanks to aremtech's know-how and the addition of additives, a standardized, CO2-neutral feedstock can be created from a mixture of waste materials.
 
Thanks to this addition, AHT’s technology covers the entire value chain of plant operation, from the provision of input materials to the generation of energy and heat. The proof of concept for AHT technology was achieved by winning a major framework agreement to supply plants to a Japanese customer. This is an important milestone for the company, especially as the contract for the delivery of 20 plants comprises an order volume of around € 160 million.
 
Parallel to this important milestone, AHT intends to fully exploit the potential of its technology and also position itself as an electricity and heat supplier (contracting). Revenues from the sale of plants would then be supplemented by recurring revenues, which would also be accompanied by particularly high profit margins. This is against the backdrop that the added value remains in house, both for the input materials and for plant planning and construction.
 
In addition to the expected increase in high-margin contracting sales, AHT's profitability should also benefit from the supply chain, which is increasingly geared towards series production. This is due to higher purchase volumes of components, which can lead to economies of scale for suppliers in terms of series production. Finally, new technologies such as the production of green hydrogen from biomass or the carbonization of liquid feedstock (HTC) are to be integrated into existing or new plants.  
The positive effects of the growth strategy prepared and implemented in the past financial years are already reflected in the preliminary figures for 2023. According to preliminary figures (HGB), AHT generated revenue of € 12.12 million, setting a new all-time revenue record. The new major order resulting from the investments made led to a significant improvement in earnings in line with the strong increase in sales. According to preliminary figures, a clearly positive net profit of € 0.86 million (previous year: € -0.42 million) was achieved, which is also a record figure.
 
Based on the expected contracting sales and the existing framework agreement, we anticipate a significant increase in sales and a gradual improvement in profitability. Based on expected sales of € 77.15 million in the 2028 financial year, the last estimated year of our detailed planning period, the target EBITDA should amount to € 12.72 million. These plans do not include any inorganic effects that would lead to a significant acceleration in growth.
 
As part of the DCF valuation model, we have determined a target price of € 37.50. Based on the current share price of € 23.00, we assign a BUY rating.  

You can download the research here:
http://www.more-ir.de/d/29729.pdf

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Date and time of completion of the study (german version): 22.04.2024 (3:50 pm) Date and time of the first dissemination of the study (german version): 23.04.2024 (10:30 am) Date and time of completion of the study (english version): 13.05.2024 (4:45 pm) Date and time of the first dissemination of the study (english version): 14.05.2024 (10:00 am)

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