DALLAS, TX -- April 25th, 2023 -- Aemetis, Inc. (Nasdaq:AMTX): Stonegate Capital Partners updates coverage on Aemetis, Inc. (Nasdaq:AMTX). The full report can be accessed by clicking on the following link: https://stonegateinc.com/reports/AMTX_22Q4.pdf
Company Summary
- 5-year plan show lots of growth: Aemetis outlined a 5-year plan to reach $2.0B in revenue and $682M in adjusted EBITDA by 2027 vs F22 revenue and adjusted EBITDA of $274.6M and $(22.4)M. respectively. Inflation reduction act expected to improve NI by 341M in 2027
- Dairy biogas pipeline project expected to generate substantial cash flows: Aemetis expects to build new dairies biogas over the next five years for a total of 66 dairies. Assuming proper execution, the economics for these projects are compelling. For each dairy, the feedstock is low cost, has 25- year contracts, should produce $2.5M average revenue per dairy per year. In F27, Aemetis is expecting revenue of $302.3M and adjusted EBITDA of $264.1M.
- Jet/diesel plant is source of upside: Aemetis announced in January 2021 that it is planning to build a 90M gallon renewable jet and diesel plant using below zero carbon intensity cellulosic hydrogen produced from waste almond orchard wood. The plant is expected to supply the aviation and truck markets with ultra-low carbon renewable fuels to reduce greenhouse gas emissions. Aemetis’ expects revenue of $700.9M and adjusted EBITDA of $192.0M by FY27.
- Aviation fuel offtake agreements signed: In September 2021, Aemetis hit a major milestone by announcing a 250M gallon sustainable aviation fuel offtake agreement with Delta Airlines. The agreement for 250M gallons of blended fuel containing sustainable aviation fuel is to be delivered over a 10- year term. Since then, Aemetis has signed additional offtake agreements with America Airlines, Quantas, and Japan Airlines for an aggregate estimated value of more than $3.8B.
- Ethanol plants are strategic to RNG business: AMTX currently operates a 65M gallon ethanol plant in Keyes, California that is strategic to the Aemetis dairy biogas project because Aemetis supplies animal feed to 80 dairies that are potential biogas suppliers. Furthermore, Aemetis can use the RNG in its plants immediately without having to wait for a utility connection to generate revenue. Growth in the RNG segment is fueled by $23M of grants related to RNG, completion of the RNG interconnection unit with PG&E’s pipeline, and completing construction of the biogas-to-RNG upgrading facility.
- India plant is debt free and adds additional upside: AMTX operates a 50M gallon biodiesel plant in India. Importantly, the India government oil marketing companies are the primary purchaser of AMTX’s biodiesel. Recently, deliveries have started under a tender agreement to these companies. This plant is expected to operate at near full capacity starting in April of 2023 following changes in tax treatment of unblended diesel.
- Valuation – We are using a SOTP analysis. We are applying various EV/EBITDA multiples to Aemetis’ F27 projections and couple a discount range of 27.5% to 32.5% to discount the value to today with an annual shares outstanding growth rate range of 1% to 5%. As a result, we
About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.
