dynaCERT has a unique technology that makes it
possible to achieve emission and fuel
reductions. The research and development was
carried out over several years and is now to be
marketed. In our initial research report
(20.09.2019), we expected a significant jump in
sales in 2020 and we confirm our assumption with
this report. Nevertheless, we expect a lower
sales level due to the corona crisis. Because of
the corona crisis, hardly any units could be
produced in the first half of 2020, as the
production facility had to remain closed.
Production should now have resumed by now
(August 2020). dynaCERT was able to continue
successful sales negotiations despite the
production being halted and therefore has a very
large order intake.
Production and sales got off to a good start at
the end of 2019 and were then slowed down by the
corona crisis. In the past 2019 financial year,
sales revenues rose to CAD 1.06 million
(previous year: CAD 0.09 million). A total of
305 systems were sold, of which 189 systems were
sold in the fourth quarter. A net result of CAD
-12.67 million was achieved in fiscal year 2019,
with a very high gross margin of 71.4%. Overall,
operating costs rose to CAD 8.79 million (PY:
CAD 7.69 million), driven by higher marketing
and corporate development costs.
The first Quarter 2020 initially continued the
positive trend and recorded sales increases
until the corona crisis brought production to a
halt. Sales revenues of CAD 0.31 million
(previous year: CAD 0.00 million) were achieved
with a net result of CAD -2.46 million (previous
year: CAD -3.78 million). Sales continued
successfully and, under an exclusive agreement
for the truck market in the USA, Karbon Klean
has guaranteed a minimum quantity of over
150,000 units for the next three years.
In the past, technologies that contribute to
fuel savings established themselves on the
market extremely quickly. On the one hand,
buyers can reduce their running costs and, on
the other hand, competitors must also adopt the
technology in order to remain competitive. For
example, the market penetration of trailer
skirts began in 2008 and reached a market
penetration of over 60% just two years later. We
expect that dynaCERT's technology will also
establish itself dynamically in the market. We
have drawn up conservative planning and still
expect significant sales leaps. We expect sales
revenues to increase to CAD 32.00 million in the
current fiscal year 2020 and to reach CAD 200.00
million in 2021 and CAD 350.00 million in 2022.
On the earnings side, a similar development
should take place and we expect a net result of
CAD -1.34 million in 2020, CAD 45.02 million in
2021 and CAD 76.26 million in 2022. This
forecast model does not yet include the
extensive sales and earnings potential from the
CO2 certificates (carbon credits).
The transition of the Company from TSX-Venture
to the TSX demonstrates the quality of the
Company and should provide even better access to
institutional investors and capital.
Should the company be able to roll out the
patent-protected technology on the market
quickly, massive valuation leaps should be
possible. On the basis of our DCF model, we are
raising the price target to CAD 2.20 (USD 1.65;
€ 1.40) and assigning a Buy rating in view of
the high upside potential. # #
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Analysts synopsis --. |