Västra Hamnen Corp. Finance

• Solutions enabling production of bio-based and biodegradable plastics
• Licencing revenue model enabling fast scalability and operating leverage
• We initiate coverage with a fair value of SEK 10.5 per share

Bioextrax has developed a unique process solution that enables production of the biodegradable plastic PHA. In addition, the company is offering a technology that could utilize poultry waste in a more efficient way. The licence-based revenue model in combination with attractive market opportunities constitute an exciting upside potential for investors.

Our DCF model indicates a fair value for the Bioextrax share of SEK 10.5 given our current assessment of the risks. The company needs to showcase that their technology is applicable for production in larger scales before reaching future value inflection points. The company estimates that the recently acquired facility will be able to produce a larger amount of PHA for market introduction and sample volumes. If this phase is successful, the company will have greater opportunities to accelerate the steps toward licence agreements and therefore we see potential of revising our valuation at a later stage.

The initial research report is available here.