Stonegate Capital Partners Updates Coverage On Aemetis, Inc. (NasdaqGM:AMTX)

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DALLAS, TX / ACCESSWIRE / April 12, 2021 / Aemetis, Inc. (NASDAQ:AMTX): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/AMTX Q4FY20.pdf

Company Description

Aemetis, Inc. is a rapidly expanding renewable natural gas company and operates ethanol and biodiesel refineries. Aemetis is currently building a dairy biogas system that will capture methane from nearby dairy farms in California and then transport the methane by pipeline to its Keyes facility. At the Keyes facility the methane can be compressed and cleaned to produce Renewable Natural Gas. Aemetis expects to build 5 new dairies biogas each two quarters for the next five years for a total of 52 dairies. Importantly, for each dairy, the feedstock is free, has 25-year contracts, should produce $2.5M average revenue per dairy per year, and produce $2M average cash flow per dairy per year. Aemetis ethanol plant in Keyes, CA produces 65M gallons of ethanol per year in addition to animal feed. It also operates a biodiesel plant on the East Coast of India that can produce 50M gallons per year of distilled biodiesel and refined glycerin. The Company was founded in 2006 by biofuels veteran, Eric McAfee, and is headquartered in Cupertino, CA.

Company Summary

  • 5-year plan show lots of growth - Aemetis outlined a 5-year plan to reach $1.07B in revenue and $325M in adjusted EBITDA by 2025. From F20, this represents a revenue CAGR of 35% and adjusted EBITDA CAGR of $109M.

  • Dairy biogas pipeline project expected to generate substantial cash flows - Aemetis expects to build 5 new dairies biogas each two quarters for the next five years for a total of 52 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, and produce $2M average cash flow per dairy per year. In F25, Aemetis is expecting revenue of $175.5M and adjusted EBITDA of $141M.

  • Dairy biogas to start adding incremental revenue in F21 - AMTX completed the construction of 2 dairy biogas digesters in Q320. The project is fully funded and anticipated to be on a $30M revenue run rate in FY22.

  • Jet diesel zero carbon source of upside - Aemetis announced in January 2021, that it is planning on building a 45M 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 $467.1M and adjusted EBITDA of $136.5M by FY25.

  • Ethanol plants are strategic to RNG business - AMTX currently operates a 65M gallon ethanol plant in Keyes, California that is strategic to 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.

  • India plant is debt free and adds additional upside - AMTX operates a 50M gallon biodiesel plant in India. Through recent upgrades, AMTX expects to generate $160M in revenue at this facility once it is at full capacity. Importantly, the India government oil marketing compares are a primary purchaser of AMTX's biodiesel.

  • Valuation - We are using a SOTP analysis. We are applying various EV/EBITDA multiples to Aemetis' F25 projections, and use a discount range of 20% to 30% to discount the value to today. As a result, we arrive at a valuation range of $28.00 to $41.00 with a midpoint of $34.00; see page 7 for further details.

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.

CONTACT:
Stonegate Capital Partners
info@stonegateinc.com
(214) 987-4121

SOURCE: Stonegate Capital Partners



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https://www.accesswire.com/640050/Stonegate-Capital-Partners-Updates-Coverage-On-Aemetis-Inc-NasdaqGMAMTX

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