Ceres Power Share Discussion Threads

[scrutable] 04/7/2018 10:06

Difficult to suppress excitement at this surge in growth confidently outlined by today's news. We are suddenly seeing a clearer picture of a future UK giant at the forefront of a global sea change in technology to combat overwhelming air pollution with EVs. History will look back on the next decade as the time when humans began the escape from a new industrial dark age akin to that from 19th century smoke stacks and from the urban misery begun by industrialisation. One can see the Steel FC playing a leading role.

This comes with perfect timing as UK plc struggles to find a way out of the EU via Brexit. As a dyed-in-the- wool enthusiast for cooperation inside the EU but disappointed with the suffocating burocracy in Brussels I have suddenly become aware of the multiple initiatives incubating in so many of our great university science and business parks and see hope in each. Alternate energy from wind, waves, tides, civic and agricultural waste, and sunshine, imminent break throughs in battery design, and power storage, the hydrogen economy, magical transformations from the application of graphene and other 2D materials,, decoding of the human gene to re-engineer human cells and reduce previously incurable conditions and diseases. We share leadership in AI, and software, robotics. The list is mainly in the shadows, but is absolutely huge

We need a more inspired Government than we have at the moment, worthy enough to make good use of this flowering of science and technology. The public needs good reporting and journalism to see it all from behind the distractions of football and feasting. The future of the UK is set very fair.

[cerrito] 03/7/2018 23:39

I thought it rather inconsiderate to issue such an important RNS at a time of the day when we were focusing in on Wimbledon and the World Cup. For that reason I have not gone through their comments on what has been achieved and the future with the detailed eye required to pick out the subtleties.

That said I was surprised at this news. They have I reckon about £8m in the bank. They were about to get £18m from Weichai and one assumes a further £23m. That would give £49m.. enough for roughly five years if they continue to burn cash at the same rate as in recent years.
So why are they taking this extra £20m?
One reason may well be that they are expecting for their cash burn to increase especially with the new factory and as they say increased working capital needs; the second may be that as they are dealing with big companies on mission critical projects the credit guys at these companies have indicated that they will need CWR to have a strong balance sheet- this was a reason that Kromek gave early last year for doing an equity raise. It also has the effect that Weichai invest an extra £5m approx.
The way I read the RNS is that this £70m+ of financing will take them through to 2021 or three years hence when they should be cash flow break even- but that may not be what they meant.
I am hoping that this will be oversubscribed and be interesting to see if they increase the amount raised from the market-I guess not as it would mess yup the pro rata holdings of Weichai. .My initial reaction was that the share price would drift down but who knows there may be a lot of unsatisfied institutional demand.
PS
I assume that Richard Griffith's will pass as he did in September 2016 and be interesting to see if IP Group participate again.
PPS
A good measure of progress in the last two years was that the September 2016 placing was done at 8.75p.

[netcurtains] 28/6/2018 11:36

From the announcement:

As announced, the second potential equity investment of c.GBP23.2m will be by way of warrant at an exercise price of 16.45p/share, a 29% premium on the market value at the time of the initial announcement. This warrant will allow Weichai to hold in aggregate a 20% equity holding in Ceres Power and will be automatically exercised on the signing of the further commercial agreements expected later in 2018, subject to certain conditions.

This is also interesting:

Weichai is listed in Hong Kong and Shenzhen with a market capitalization of c. US$10bn, and has a strong track record of making strategic investments in businesses around the world, including Société; Internationale des Moteurs Baudouin in France, Power Solutions International lnc. in the U.S. and KION Group AG (MDAX-listed) in Germany.

[muffinhead] 27/6/2018 20:31

The China Hustle

[muffinhead] 27/6/2018 20:14

House of Fraser comes to mind recently

Lots of Chinese stocks on AIM that went bust after fleecing naive UK investors

[netcurtains] 27/6/2018 18:38

The aggregate price of 16.45p....
Its quite possible small chinese investors could push this up way beyond that price.

Be interesting to see how this develops...

Does anyone know of other quoted UK companies where the Chinese are a significant shareholder?

But lets get to 16.45p before I start having grand thoughts!

[netcurtains] 27/6/2018 13:58

thanks bones for view

[netcurtains] 27/6/2018 13:58

thanks bones for view

[bones] 27/6/2018 13:17

Netcurtains, got your message from the AOR thread. I'm on holiday at a bar so no time to research at the moment.I'm not really into these new power stocks like ITM, RED, etc as I struggle to know what technology will ultimately prevail. Given time I will do more research I am sure!

[nivison] 27/6/2018 12:27

agreed.

The economically viable manufacture and distribution of hydrogen (from green renewable energy) is the nut to crack I think. Some interesting projects already in place in Orkney doing just this - providing electricity to ships whilst docked in harbour. A 500kw electrolyser manufactures hydrogen using energy generated by tidal turbines. The hydrogen is transported to Kirkwall and fed into a full cell to generate electricity.

Just google Orkney Hydrogen

[gnnmartin] 27/6/2018 11:41

CWR's fuel cell could be a part of storing energy from wind farms, but it is only a part of that solution: it requires some technology to turn electricity into gas, which can then be turned back into electricity by the CRW fuel cell.

A much more obvious use for the CWR cell is in CHP (combined heat and power) for large buildings, or as a more efficient power source for power hungry sites such as data farms.

[netcurtains] 27/6/2018 10:58

this looks good: -- Approval also covers the additional potential equity investment of cGBP23.2m which is conditional on the signing of further commercial agreements before 30 November 2018

[muffinhead] 26/6/2018 17:07

Management must be desperate for cash. The technology has promise but despite years of R&D, none of the "partners" have taken and run with it.

Read the other day that 40% of the Uk's electricity comes from wind power....and lots more investment to come.

For the UK, fuel cells will probably only have a niche market.

Agree, the Chinese will steal the IP.
Weichai Power Co., Ltd is a Chinese state-owned enterprise ffs

Who is going to fight Ceres corner in the Chinese courts and hope to win against a communist government.

[nivison] 26/6/2018 16:08

I share your nervousness about IP transfer to a Chinese company. I don't think China really grasps the concept of IP. Slightly different but one of my other investments tripped up in China over ownership of a brand name which went to court and the local distributor won. I recall Top Gear reporting that BMW lost a case against a Chinese company making knock off BMWs.
I really like this product. I believe it will form part of the energy mix in the future and am invested here quite heavily for me. But I hope CWR are being extremely careful in protecting their IP and ensuring that revenues do indeed flow once/if the cell is used in Chinese products.
Revenue from sales will shift this share price but that may take some time.

[dozey3] 26/6/2018 15:23

Big mistake imo, but i’ll hang on in there in the hope that the Chinese won’t steal the lot. If CWR cannot make a go of it with one or all of the partners they have on board then perhaps they haven’t a viable proposition.

[zeppo] 26/6/2018 11:47

Publicity and further announcements may be necessary to actually activate the share.

z

[nivison] 26/6/2018 10:56

My fingers and toes calculation is basically - Weichai putting £40 million into the company for 20% means that the existing shares, which would constitute 80% of the company after the issue of new shares, should have a value of £160 million. Which is more or less where we are. Or am I being a little too simplistic?

[zeppo] 25/6/2018 16:26

According to a Scottish Mortgage spokesperson at their London seminar last week (they have £6 billion+ in overall investments) China intend to be major players in electric vehicles.

Shares will be diluted but Weichai buy in at slightly higher prices than today's which may be affected by the USA/China sentiment.


z

[cerrito] 25/6/2018 09:25

Just after reading this RNS, I read a FT article saying that Trump looking at restricting Chinese investment in tech industry in the US, although clean energy not specifically mentioned.
Weichai have a good deal here.
Given this deal is in Chinese interest, I would not have expected approval to be denied so today's share price reaction is for me logical.

[danieldanj] 25/6/2018 08:53

Watch Ceres Power (CWR) closely @ current levels on Weichai‘s deal. Check this out