ATOME set to highlights its unique position in hydrogen market by year end – broker
Just as the International Energy Agency (IEA) forecasts exponential growth in the use of low-emissions hydrogen this decade, ATOME PLC (AIM:ATOM) is set to achieve several milestones in the near term that will de-risk its plans and highlight the company to investors, said house broker SP Angel.
The use of green hydrogen is seen as a key part of global 2050 net zero commitments, the IEA said in its latest report, with the largest market participants now jockeying for position to secure low-carbon fertiliser supplies for their client base.
The broker said, reiterating its ‘buy’ rating and 200p per share target price.
ATOME is the only international green hydrogen and fertiliser development company on the London Stock Exchange and provides investors with multiple near-term catalysts as it moves into the development stage of the Phase 1 Villeta project,
Last month, ATOME raised £2.65 million from management and investors to provide working capital to progress the 145MW Villeta project towards the final investment decision (FID) by the end of the financial year and commence pre-FEED activities at the 300MW Yguazu project.
The company has already received a number of written detailed non-binding offers in respect of each of the equity and debt project finance portions for the proposed development, with the debt substantially oversubscribed and equity funding proposals also including interest in ATOME’s wider portfolio of projects, alongside Villeta.
ATOME has said the aim is to complete the funding and start on-site work by the end of 2024, with signing the engineering, procurement, and construction (EPC) contract, finalising project funding and progressing to FID during the fourth quarter to allow the commencement of on-site construction in Paraguay by the end of 2024.
The note read,
We expect activity in Paraguay to accelerate over the next few months as ATOME first selects an EPC contractor and confirms an offtake agreement on the Phase 1 Villeta project, which will enable the completion of project financing and FID approval,
“As such, we expect the company to deliver several near-term valuation catalysts that will de-risk the Villeta development and its forecast stable cashflows, which should ease the market’s uncertainty and drive the share towards our 200p/sh 12-month target price.”
Global demand for low-emissions hydrogen grew almost 10% in 2023 to almost 1 million tonnes (Mt), the IEA said, and though government action that has “intensified recently”, demand could be boosted boost demand to over 6Mt per annum by 2030, still only a tenth of the needs of the net zero emissions by 2050 scenario.
READ the latest news shaping the hydrogen market at Hydrogen Central
ATOME set to highlights its unique position in hydrogen market by year end – broker, source
