This dual-listed renewable energy player has recently commissioned research which values the share at R18 (a premium to the current R8/share). We take a closer look at the share and its key fundamentals.
Renergen currently has a market capitalization of R901m having listed on the AltX exchange in June 2015 and it also has a secondary listing on the ASX (Australia).
Renergen is an emerging producer of helium and liquefied natural gas (LNG), with existing production and sales of compressed natural gas. Renergen’s principal asset is its 90% shareholding in Tetra4, which holds the first and only onshore petroleum production right in South Africa, giving it first mover advantage on distribution of domestic natural gas. The production right was issued by the DMR and is valid for 23 years. Tetra4’s Virginia Gas Project is located in the Free State, approximately 250 km southwest of Johannesburg.
Tetra4’s Virginia Gas Project is located in the Free State, approximately 250 km southwest of Johannesburg. The natural gas contains one of the richest helium concentrations recorded globally.
In February 2019, it received a S$40 loan facility approved by OPIC and June 2019 it AUD$10m by listing on the ASX.
There have been no directors dealings recorded for Renergen – this could be considered somewhat surprising considering the supposed growth potential related to the stock and the current marketing drive.
Having said that, Stefano Marani (CEO) holds an 8.95% stake in the business (down from 11.05% in 2018) while Nick Mitchell (COO) holds 8.59%.
JSE-listed small and mid-cap shares have struggled with a lack of liquidity over the last 2 years and this has weighed on many of the counters.
The JSE listing has an average 30-day daily trading volume of 18349 (R146 792) with the Australian listing doing 8039 shares on average 73c/share (AU)
MST Access Report:
Renergen commissioned MST Access to produce a research report on the company which calculates that the share may be worth R18/share.
The company identifies the below near-term catalysts for the share price:
- Further LNG and / or helium supply contract signings
- Drill results from the exploration of the high-concentration helium sandstone play
- Successful development drilling, including incline well success
- Announcement of contracts for the construction of Stage One Liquefaction Plants
- Commencement of construction of Stage One
The full report can be found here.