ITM Power PLC Align Research ITM Power update note release
February 28 2017 - 2:22AM
RNS Non-Regulatory
TIDMITM
ITM Power PLC
28 February 2017
ITM Power Plc update note. Conviction Buy recommendation intact.
New price target 37.9p
Since our initiation of coverage in August 2016, renewable
energy specialist ITM Power has made good operational progress in
its two divisions, with the wider hydrogen energy industry
continuing to attract investment from governments and industry
across its target markets.
GBP5.7 million fundraising completed to support growth
ITM's cash position of GBP1.7 million as at 31(st) October 2016
was recently boosted by the proceeds of a GBP5.7 million firm
placing. The funds will be used for working capital to support the
growing order book, to strengthen the balance sheet and drive the
move towards positive cash flow.
Power-to-Gas division scaling up
In the Power-to-Gas division, ITM has announced three further
contracts for the supply of electrolysers, including for a landmark
UK trial. The focus now is upon scaling up its electrolysis
equipment to serve larger markets.
Developing relationship with Shell in Clean Fuel
In collaboration with industry partners, including energy giant
Shell, ITM has continued with the successful roll-out of its
hydrogen refueling stations across the UK. Driving the monetisation
of its estate, six further fuel contracts with fleet operators have
been signed over the past six months & more expected.
Valuation suggests significant upside from current levels
With ITM continuing to trade in line with expectations we
maintain our forecasts as set out in our initiation of coverage
note. Accounting for the increased number of shares in issue
following the placing our fair value target moves to 37.9p from
43.8p. With this implying 110% upside from the current share price
of 18p, we maintain our Conviction Buy stance.
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