http://www.afcenergy.com/

Dawnay, Day Corporate Broking Research Note

Aim Admission Document

Double page write-up in Shares mag this morning......looks very promising.....won't reach my 100p target by end of year probably but a rise back to 50p could be coming.....the potential is staggering with this company.....

The full report from Shares Magazine

Fuelling the future at AFC
Shares in AFC Energy are up 278% since Adam Bond took over in December 2014
The drive for efficiency will be every bit as important, if not more so, than cyclical energy prices in determining the destiny of clean energy in the future. That is certainly one of the main takeaways from an afternoon in the company of Adam Bond, the chief executive of AFC Energy (AFC:AIM).
Since taking over at the helm of the alkaline fuel cell specialist in December 2014, Bond has pursued a clear and coherent strategy which has demonstrated the company’s own march towards the efficiencies needed to commercialise their clean energy technology. The markets in any event seem to have appreciated the milestones set by the company. Year-to-date the shares are up 226%.
(Click on chart to enlarge)
AFC ENERGY - Comparison Line Chart (Rebased to first)
Off the boil
Admittedly, the £95 million cap has come off the boil somewhat of late and on a three month view the stock is down 43%. I ask Bond if he is concerned that AFC’s stellar momentum might be running out of steam.
‘The scope of the opportunity for AFC Energy continues to grow and we are firmly in dialogue with a number of partners in advancing into the commercial fuel cell world and towards our stated objective of 1GW of fuel cells under development or installed by 2020,’ he tells Shares.
‘With the work we are doing at the moment behind the scenes, there is a significant amount of momentum still to be accessed as we finish out 2015 and roll into 2016,’ Bond says.
‘The momentum the company currently has behind it is infectious and to see how it has evolved and matured over the last 12 months has been inspiring. I’m confident with the activities we are currently working on, we will see a reinstallation of the momentum we saw in the share price over the first six months of this year,’ he adds.

An equity swap arrangement with specialist finance provider Lanstead saw AFC recieving cash once the shares went above a certain price (13.8p) and this deal is coming to a close after 18 payments. Because Lanstead has been paying AFC once the share price is above 13.8p, the group has not had to burn so much of its own cash. The drawback being that, as a result, Lanstead held a lot of AFC equity creating a significant overhang.
However with Lanstead Capital now holding only around 3% and another stakeholder – Linc Energy (T16:SGX) – selling its holding, is the recent share price volatility behind the company?
‘The selling out by these two shareholders has most likely seen downward pressure placed on the stock, however, I believe the sentiment in the market towards AFC Energy remains positive and indeed, there is growing support behind us in not only delivering on our objectives for 2015, but also in articulating and being held accountable for milestones into 2016 which we will be coming out with over the coming weeks,’ Bond says.
Managing the share price is not the job of a chief executive, so what is Bond’s plan for sustainable growth? ‘We are all about creating a long-term value proposition for our shareholders through our business model and in the form of partnerships we are currently with.
‘We should not be fooled into seeing short-term share price increases as the prize here, but in the creation of a massive corporate value proposition that will see the AFC fuel cell form an increasingly large component of the global energy mix,’ Bond says.
Although Bond took over as chief executive of AFC Energy at the end of last year he had been a non-executive board member prior to this.
AFCEnergyStall
Energy background
‘I’ve spent my career in the energy space. I have a lot of experience around clean technologies and the commercialisation of new technologies. AFC has been around since 2006 and we listed in 2007. We’re predominately focused on developing and delivering what will be the world’s first alkaline fuel cell technology.’
Bond then goes on to highlight one of the crucial issues in the evolution of a technology company:
‘I think that a lot of technology companies, the biggest challenge is the transition from technical to commericial. You can get very comfortable in the laboratory trying to make something work.’
We’re at a point now that we know the fuel cells work. For the first time, we’ve delivered an outcome in Germany (referring to the Stade KORE in Germany) so we’ve proven that we can generate electricity.’
The question at that point becomes how best to optimise that technology for commerical applications. That to Adam Bond’s mind, means focusing on the right questions.

‘Those questions are things like; what type of power output do we require for commericial applications? This will differ from market. The market for fuel cells in Europe and the output requirement will be very different from that in Korea for example. So the question then is where you are at on the technology front with the market which will drive commercial outcomes today?
‘That’s what I’ve been trying to look at; understanding the market and the technology and putting them together. My background is in the global energy market, I’ve worked throughout the world and I understand the different drivers within government and within industry as well as the drivers within the clean energy space.’
Along the way, AFC’s technology has garnered a number of commercial deals in Korea, Thailand and Dubai with installations of 50MW, 10MW and 300MW respectively. All of which of course plays well when set against Bond’s ambitious 2020 pipeline target of 1GW.
It is important to remember that while AFC Energy showed cash outflows of less than £1 million in the six months to the end of April, this might be flattered somewhat by the company’s Lanstead equity swap.
Investing in new or unproven technologies is inevitably fraught with risk and AFC is no exception in this respect. That said, the company’s ability to attract high status investors has at least proved newsworthy. Whether or not investors of the media profile of Chelsea owner Roman Abramovich have added significantly to share price performance is perhaps moot.
Or at least to Bond, the oligarch’s stake – while welcome – has not been a significant catalyst for either over or under-performance. ‘Mr Abramovich has been a shareholder in AFC Energy now for several years and so I don’t believe there is any direct correlation between his strategic decision to invest in the company and any perceived recent hype in the share price.
‘He remains very supportive and can see the massive opportunity that exists for AFC Energy¹s fuel cell in the global market and so in that context, his investment is and will continue to be most beneficial to the company¹s long-term deployment strategy.’

Mitigating risk
So far, AFC has done an admirable job of mitigating risk and managing investor expectations. ‘As we continue to deliver our 11 stated milestones for 2015, we are at each stage confirming a de-risking of our technology in the industrial setting,’ says Bond.
‘With the introduction of executive commercial and operations teams at AFC in recent weeks, we are working on fully understanding these risks and using our activities in Germany and elsewhere to ensure these risks continue to be mitigated and managed as best as we can at this stage of the project and technology lifecycle.’
Bond adds that this includes the full range of technical, operational, funding, staffing, execution and regulatory risks. ‘AFC Energy is in a strong position to manage several of these risks, but the idea of partnering in chosen regions is to work collaboratively with our partners and contractors to ensure appropriate risk mitigation strategies are in place across the full spectrum of the risk register,’ he explains.

Fuel-cell primer
Fuel cell technology is increasingly becoming recognised as a better technology option than conventional internal combustion engine generators or batteries.
Applications can be portable, stationary or used in transportation. As the name suggests, portable fuel cells are designed to be moved, and this category includes auxiliary power units (APU). Stationary power fuel cells are units designed to provide power to a fixed location and transport fuel cells provide either primary propulsion or range-extending capability for vehicles.
There are a number of different electrolytes employed in the production of fuel cells and AFC Energy produces alkaline fuel cells that bypass the need for precious metal catalysts to be used in manufacture. An added advantage of AFC’s proprietary technology is that water is the main constituent by-product of the process and this in itself is a selling point in markets like the arid Middle East.

PL9A0133-1
Biography
Adam Bond, Chief executive
Adam Bond took over as chief executive of AFC Energy in December 2014, having joined the board as a non-executive director in 2013. With over 15 years’ experience operating within the international energy sector Bond has held posts both in executive management positions for listed energy companies, and in advisory capacities to both governments and the private sector. He is currently a non-executive director of Waste2Tricity where AFC has an equity interest. Prior to joining AFC Energy, Bond held the position of global president – clean energy at Singapore-listed and Australian domiciled Linc Energy (T16:SGX).
INVESTMENT CASE
AFC Energy (AFC:AIM) 32.5p

SUMMARY
AFC’s disruptive technology has the potential to displace mainstream gas-fired power stations for utility scale generation; being cleaner, more efficient, modular and therefore more versatile, and ultimately lower-cost. The fundamentals of AFC’s technology also lend it to low-cost design and manufacture.

Bull case
• Has consistently delivered on a detailed series of technical milestones
• Closing in on profitability; should be in the black by the end of 2017
• Disruptive potential dovetails with emerging global energy efficiency trend
Bear case
• Share price highly newsflow-sensitive
• Disruptive competion
• Roll-out execution time-frame risk
Market value: £95 million
Prospective PE Oct 15: n/a
Prospective dividend yield: n/a

Is It Too Late To Buy 2015 Winners Fevertree Drinks PLC (+205%), AFC Energy plc (+251%) & OptiBiotix Health PLC (+280%)?
By Motley Fool | Tue, 10th November 2015 - 16:25

AFC Energy

AIM-listed AFC Energy last month completed milestone 10 of its 11-step journey to prove its low-cost alkaline fuel cell system on an industrial scale at a gas plant in Stade, Germany. A successful demonstration next month would open the way for global commercial deployment.

AFC's shares, currently trading at 36p, are up 251% for the year to date. However, they were even higher during the summer; in fact, as high as 58p. I'd say the market had got a little over-excited by AFC's potential, and gave insufficient weight to the risks and what is a still-long road to successful commercialisation and profitability.

However, with the froth having come off the shares and the market value down to around £100m, AFC could be worth a closer look by investors who like to include a speculative stock or two in their portfolios.

Todays RNS is one we have been waiting for.

Manufacturing partner has, 'Global reach', 'Leading manufacturer service company' (so excellent capacity for gearing up production), 'Manufacturing process optimisation ,cost reduction', (so a bigger profit margin for AFC).

They would not be looking at this if they did not have at least a few orders round the corner.

2016 should be very interesting.

AFC Enters Heads of Agreement with Global Manufacturing Partner

AFC Energy plc is pleased to announce that it has signed a Heads of Agreement with a global manufacturing partner for the international procurement and manufacture of its leading alkaline fuel cell systems.

The Heads of Agreement sets out the basis of a proposed manufacturing services agreement, the terms of which will be negotiated over the coming months with AFC expecting to make an announcement on the final terms of the deal thereafter.

The prospective manufacturing partner has global reach, is widely regarded as a world leading manufacturing services company, and will offer manufacturing support to AFC, and to support value engineering, manufacturing process optimisation and therefore cost reduction through a competitive procurement of the supply chain and leveraging the network and existing infrastructure.

Mr Adam Bond, AFC's Chief Executive Officer, said: "Having met representatives from our prospective manufacturing partner on their visits to our Surrey-based head office, I'm confident in our ability to close a deal that will reflect the mutual opportunity for both parties in taking this transaction forward, and in their capability to deliver on AFC's aggressive growth trajectory envisaged over the coming five years as we progress towards our targeted 1GW of power generation in place or under development by 2020."

Mr Bond further commented: "Whilst I expect negotiations on a manufacturing services agreement to progress over the coming weeks and months, I believe the signing of the Heads of Agreement is further validation of the global interest being shown in fuel cell technology generally, and specifically in AFC's offering and positioning within this international market."

Is AFC ready for the bounce?
Indicators are pointing to that as the SP has a strong turn around at 12pm from being well down on the day to go positive and well up so far

AFC and Dutco Sign Heads of Agreement

AFC and Dutco Sign Heads of Agreement to Develop Business Plan for Large-Scale Fuel Cell Deployment across the Middle East


AFC Energy plc (AIM: AFC), the industrial fuel cell power company, is pleased to announce that it has signed a Heads of Agreement with DNR Industries Ltd., part of the leading Dubai-based investment and project developer, Dutco Group of Companies ("Dutco") to jointly fund and develop a business plan for the large-scale deployment of AFC's fuel cells across the Middle East.

The business plan will focus on defining a commercial strategy for what is expected to be a significant commercial fuel cell deployment opportunity, and pending the outcome of the business plan, is anticipated to result in the formation of a joint venture between the two companies to execute the plan commencing in the first half of 2016.

The joint venture between AFC and Dutco, is expected to cover the deployment of AFC's fuel cell across the United Arab Emirates, Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, Qatar and Kuwait. Based on initial estimates from market soundings already undertaken in the region individually and collectively by AFC and Dutco over recent months, this could present an opportunity on its own to deliver a large percentage of, if not in excess of, AFC's stated target for 1GW of fuel cell development by the end of 2020.

The business plan will also explore potential commercial models for the joint venture between the two companies with a long-term strategic view being taken regarding the prospect for a regional power utility.

more....

Hi Skinny,

Looks really good, but I wonder how the sp will be effected as I have almost given up trying to read it.

Cant get much better than this.

I have tried to look into Dutco but all links appear to be down, 'page can not be reached'.

Shock perhaps!

Yes their site appears to be "offline", a brief description here.

AFC Investor Day Presentation
AFC Energy (AIM: AFC), the industrial fuel cell power company, announces that Mr Adam Bond, AFC's Chief Executive Officer, will present at the Company's annual Investor Day event at Dunsfold today. The presentation will be followed by a tour of the Company's facilities and a Q&A session.
No new price sensitive information will be discussed by the Company.
The presentation will be available on the Company's website.

Is AFC Energy plc A Better Buy Than Ophir Energy Plc & Vedanta Resources plc?
By Motley Fool | Tue, 24th November 2015 - 15:58

The energy and resources sectors have endured a horrific year, with many of their constituents posting major share price falls. Of course, the key reason for this is a slump in the price of a wide range of commodities such as oil, and this has led many investors to consider whether the global energy mix is now set to change at a rapid rate.

In other words, while energy demand is forecast to rise in-line with an increasing world population and the industrialisation of the emerging world over the next few decades, the proportion generated by cleaner methods may be higher than previously thought. As a result, many investors are now seeing the glut in supply of a number of resources and concluding that growth is more likely to positive in cleaner, greener fuels in future years.

One company which has benefited from this shift in investor sentiment is alkaline fuel cell producer AFC Energy (LSE:AFC). Its share price has risen by 220% since the turn of the year as it has gradually progressed through a number of its key milestones as it seeks to complete its 2015 Power Up programme.

Further positive news was released today, with AFC signing a Heads of Agreement with Dutco to jointly fund and develop a business plan for the large-scale deployment of AFC's fuel cells across the Middle East. This could prove to be a strategically important region for the company and could contribute significantly to its plan for 1GW of fuel cell development by 2020.

Clearly, AFC is a relatively high risk business which lacks the size, scale and financial stability of large energy companies. However, it appears to offer high potential rewards and, with it turning a profit in its most recent half-year, appears to offer a more viable business opportunity than many equivalent-sized oil or mining exploration companies. As such, for less risk averse investors it could be a sound long term buy.

Hmmmm....looking a bit dire at the moment. Averaging down at some point is looking like an option which I didn't particularly want to do.

Hi Harrycat,

Looking at the high volume today I can see no reason for such volume so it looks to me like MM Manipulation.

The sp has been steadily dropping since august, so not sure the 'manipulation' theory is totally correct.

greekman

re - volume

there is a two way trading, but all started with sells, mainly on the order book.at one time there was 200K at 27.50p and another 57K at the same price, there was some good buying at that price and soon the "AT" took them all at one go. since more has been added and they are not small size.
meaning there is a seller around on then order book and that is who runs the business including today.

trades earlier when the 257K at 27.50p on the order book offer side were taken
note - trades placed on the offer side are sells, and will be taken as "AT"

27-Nov-15 10:49:48 27.50p 10,000 A

27-Nov-15 10:49:48 27.50p 57,500 A

27-Nov-15 10:49:48 27.50p 63,000 A

27-Nov-15 10:49:37 27.50p 50,000 A

27-Nov-15 10:47:26 27.4999p 10,000 O

27-Nov-15 10:38:07 27.50 37,000 A

Small spread at the moment 27.50 v 27.75p

with 20K v 28K at price, already 2x10k taken since the offer at 27.75p

The positive thing would be if share price bounces to a small loss for the day and the Candle stick is a black hammer, it would be too much to expect to be a white hammer that would mean a small rise.
The TA then would be bullish as it would be considered as a reversal signal

it's certainly a strange one this
perhaps it's someone steadily lightening their (over)load for there certainly seems to be no bad news around

Simples.

CWR and ITM 10 year chart performance might give a clue..

oh and jam tomorrow won't work in a bear market.

What's happened to this....good news and it dives...(;(....

CLEAN ENERGY AND BILL GATES

http://money.cnn.com/video/news/2015/11/30/bill-gates-cop21-clean-ener