Carbon Energy receives Speculative Buy from broker -...

Carbon Energy receives Speculative Buy from broker - * (AU)
Carbon Energy receives Speculative Buy from broker

Thursday, February 25, 2016 by Proactive Investors

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Carbon Energy has received a Speculative Buy from APP Securities
Carbon Energy (ASX:CNX) has received a Speculative Buy from APP Securities, with a target price of A$0.14.

The company last traded at A$0.014. The following is an extract from the report.


Low risk UCG commercialisation pending

Carbon Energy is a small QLD based energy technology company focussed on the development and commercialisation of underground coal gasification (UCG) projects.

The company owns proprietary gasification technology (keyseam) which can be utilised to develop otherwise stranded coal deposits, both here and overseas.

Future sources of revenue and  earnings are expected to come from developing UCG ready coal assets (both here and o/s (Asia)), as well as licensing and technical services income and royalties resulting from its tie up with the Chinese based Beijing JinHong Investment Co Ltd (JinHong).

We have determined a valuation of $0.23/share based on the successful rollout of the companies licensing model in mainland China, coupled with the inherent value of the company’s existing technology.

We like CNX for the following reasons:

- Proven technology through to feasibility study level;
- Exposure to the energy/chemicals growth markets of China/Asia;
- A licensing model that has already been successfully demonstrated in Asia;
- Potential valuation upside on conservative assumptions.

We initiate research coverage on CNX with a SPECULATIVE BUY and price target A$0.14/share, representing 60% of the assessed valuation of $0.23/share.