3 clean tech stocks that defied the odds: AEI, WND, OEC

  • Jun 04, 2020 AEST
  • Team Kalkine
3 clean tech stocks that defied the odds: AEI, WND, OEC

Summary

  • Signing of new agreements sheds important light on clean tech space amidst COVID induced market challenges.
  • Prominent clean tech stocks with decent YTD returns continue to remain in investors’ watchlist.
  • Global climate agenda and strategic business focus on clean technologies may define the clean tech space amidst growing fiscal burden and heightened business cash crunch.

With novel coronavirus casting dark shadows on global growth and business confidence, policymakers have been on their toes in implementing fiscal and monetary initiatives to aid sluggish economies. However, some analysts argue that with deep hole in the governments’ treasures, climate policies may take a backseat in the global agendas.

Technology shifts and advancements have been no doubt instrumental in aiding sustainability of industries during COVID-induced challenges, fintech and proptech being a classic example. In sharp contrast, positioning of clean tech companies in leveraging technology towards environmental benefits needs to be watched out in near term.

The challenges faced by clean tech players in terms of expected dip in demand and installation constraints may be monitored to gauge the growth trajectory in the space. However, given the efficiencies, any sort of emerging trends in the adoption of these clean technologies given the renewable energy focus may shed some light on the potential green shoots.

In this context, let us look at some cleantech players and their positioning amidst attempts to weather the coronavirus storm.

Aeris Environmental Ltd (ASX: AEI) Eyeing Key Chinese Presence

Engaged in the sale and development of products to eliminate growth of biofilm in water treatment and air conditioning systems, Aeris Environmental recently announced that it has implemented a strategic alliance with a consortium of leading Chinese businesses with a minimum purchase commitment amounting to 20 million RMB in the first year, in a bid to expand Chinese presence. The consortium comprises of Shanghai Taitrust Industrial Group Co., Ltd and Shanxi Tond Chemical Stock Limited Company. Besides, the consortia is aiming at additional growth driving meaningful social and financial outcomes.

The market positioning of Aeris may be analysed by looking at its operational and financial performance for the quarter ended March 2020 outlined below:

  • AEI seems to be on the right track to increase production of environmentally sustainable technologies domestically and internationally. While demand for its entire portfolio is increasing, the company is investing its resources by way of added capacity.
  • Network of strategic distributors, wholesalers and customers of the company now provides an accelerated path to market throughout the entire portfolio of environmental hygiene, mould remediation, corrosion prevention as well as energy efficiency.
  • During the quarter, AEI delivered record sales revenue amounting to $4.02 million, while revenue for the nine months to March 2020 stood at $7.25 million.
  • AEI successful wrapped up the capital raising of $12 million with strong demand from leading institutional and sophisticated investors. Notably, AEI is currently debt free, cash flow positive and profitable.

 

Do Read: How these stocks are becoming a ray of hope amid COVID-19 torture?

The stock of AEI closed the day’s trading session at $0.575 on 4 June 2020, down by 3.4%, while it has provided 109% return on YTD basis.

Windlab Limited (ASX: WND) Posted  16% FY19 Revenue Growth

International renewable energy development company with distinct advantage on wind energy projects, Windlab recently updated that Kennedy Energy Park Pty Ltd has given their acceptance to EPC Contractor to further extend the stand-still agreement in relation to the previous adjudication determination as well as the continuing contractual dispute until 30 June 2020.

However, the EPC Contractor continues to work in order to deliver a compliant generator performance standard (GPS) model to allow project registration and testing.

In another update to market, the company mentioned that the Scheme Booklet has been registered with the Australian Securities and Investments Commission (ASIC) in relation to the acquisition of all of Windlab’s shares by Wind Acquisition 2 Pty Ltd by way of scheme of arrangement.

While the management continues to monitor the COVID impact on business and operations, WND recently released annual results for the period ended 30 March 2020, with following key highlights:

  • Growth of 16% in revenue to $4.04 million for FY19, primarily driven by its asset management business where revenue growth stood at 26%.
  • Revenue earned largely from sale of projects, sales of services for project development, construction and asset management, royalties and consulting income.
  • Profit from asset management reported at $1 million, while the group reported loss of $11.7 million mainly because of the impact of significant items at Kennedy Energy Park.
  • Net cash outflow from operating activities reported to be $10.26 million, which includes increased receipts from customers offset by additional project spending, particularly in East Africa.

 

The stock of WND closed the day’s trading session at $0.995 on 4nd June 2020,while it has provided a return of 44.2% on YTD basis.

Orbital Corporation Limited (ASX: OEC) Well Positioned to Meet Evolving UAV Market Needs

Orbital Corporation Limited is involved in the revolutionary design, proven manufacturing processes and rigorous testing to deliver superiority in UAV propulsion systems and flight critical components, ensuring innovative technical solutions for a cleaner world.

The company has recently inked a contract with Northrop Grumman Corporation, which is leading aerospace and defence technology company, under which both parties will be focusing on the advancement of a hybrid propulsion system for a Vertical Take-Off as well as Landing unmanned aerial vehicle (or UAV).

The company plans to support, supply and develop two initial hybrid propulsion systems for amalgamation into Northrop’s small UAV development platform, while delivery is expected by 2021.

With respect to production, the company experienced no impact from the outbreak of novel coronavirus pandemic as OEX is an advanced aerospace manufacturer supplying global defence prime contractors. The company continues to deliver on its production commitments and is focused on managing and supporting its global supply chain where required.

During 1H FY20, OEC signed a Long-Term Agreement with key customer Insitu Inc., which is a wholly owned subsidiary of The Boeing Company to supply engines in the entire fleet of military drones. On the outlook front, the company is on track to meet the FY20 revenue guidance of $25 million -$35 million and full-year profitability.

The stock of OEC closed the day’s trading session at $0.860 on 4 June 2020, while it has provided a return of 122.37% on YTD basis.

 


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