Hydrodec Share Discussion Threads

[mortimer7] 26/11/2013 16:12

ref Eclairs post 2792 : I had exactly the same intention to sell my open offer shares & like you have now changed my mind as the unfolding HYR story looks impressive.

[mortimer7] 26/11/2013 16:09

Nice to see break today up to 14.25p has held since lunchtime, new year high achieved as well.

[capricious] 26/11/2013 14:04

Lol, yes it was always the elephant (heavier than an albatross) in the room. If you look back at the past two years of RNS, you'll see a structured long term plan, which culminated in the clearing of debt as the final part to resetting the company to a growth company. They pretty much executed on all those plans, and the turn around has been quick.

We haven't heard a lot regarding Japan, which may have something to do with there being no near term plans or to avoid any chance of disappointment. I'm still confident they can do something with further news in 2014.

[dirty75] 26/11/2013 14:02

and no debt like the previous albatross(es)

[capricious] 26/11/2013 13:05

Now sell side hits 14p, a real break from previous highs.



Next resistance will be 15-15.5p. We're yet to see if this hits the buffers, happened on three occasions in recent history, but this time around there is a clear path to new revenue streams and profitability, might make the difference.

[eclair] 26/11/2013 12:25

Yes indeed. Tempting to take some profit now, which was my original plan with the excess shares, but when I think what would I do with the money, it's hard to find other shares that look as attractive, so I'll hold on for a while.

[capricious] 26/11/2013 11:44

Broken through, lets see if it now acts as a floor to support a new range

[capricious] 26/11/2013 10:33

Looks promising

[capricious] 26/11/2013 09:26

Forgetting longer term significant resistance/support levels, nearer term there is one around 13.8-14p, be nice if we break through that, rather than it acting as a downward turning point again.

[3dwd] 26/11/2013 08:31

In simple terms ,HYR is becoming a global leader in this field .. I am confident the management have some serious plans for where HYR will be in 3 years .. They are fully incentivised and the majors plus the mkt are beginning to realise the full potential of what HYR is all about .. 50p is a realistic tgt price over one year ..or someone may bid for the company ???

[capricious] 25/11/2013 21:07

The drop in crude (and probably further to go) as a consequence of the reduction in geo-political risk, will certainly give a boost to the US economy and the UK.

An extended drop below $90 (if the Saudi's don't adjust output) should be like firing up the money printing presses, but in a good way, a nice new year boost.


How it effects resale/feedstock costs and therefore margins, is a little more difficult to say. Since demand is good, and demand in Hydrodec's case has a correlation with industry/housing etc, margins should be stable to improving.

With Superfine becoming more widely accepted, maybe even gaining a more independent price, i.e. a narrowing of the discount between Superfine and Pale 60, it's possible and hopeful feedstock (No2 diesel) will drop faster than resale price.


I did post a long time back, that some of the utilities (Hydrodec's main customer base) were finding it difficult to create margins on very low gas prices. Over the last 1.5-2 years there has been a slow improvement, still relatively low, I'm guessing this has helped direct demand over and above the economic picture.

[capricious] 25/11/2013 15:25

Checking over an old RNS

"In Australia we are confident of receiving A$1.9 million in grant funding towards the development of a pilot plant in respect of the application of the technology to industrial and motor oils. We also plan to address the sub-scale operation in Young."

We know the second part, interesting to see if the grant is applicable to the co-location plan.



With a capcity target of 60ML/Y, and the best case scenario with the included 0.50c/L payment, that makes a very nice addition to revenues. We are yet to hear how much the per/L fee (tolling agreement) for processing will be, but due to current scale, the saving in operating costs will offset a certain amount of the fee.

I don't know whether the stewardship payment will be shared or whether that will form part of the deal, or indeed whether the payment lies with the owner of the material or the toller.

[capricious] 25/11/2013 10:43

When you consider that the announced plans when completed (and all goes well) increase capacity by a factor of 7, compared to dilution of around 3-4 since the historic highs (50p), I think it's safe to say there is a lot of upside.

It's not as straight forward as that and the dynamics were a little different back then, but logically speaking the share price will come to reflect the changes.


I said earlier that I feel sure that the Edison targets will be met within two years, and 3-5yrs should see 30-50p. These are my 'conservative' targets, there is a lot more ceiling room if the company continues to execute as well as it has done.

[3dwd] 25/11/2013 09:28

i am now adding to my position .. the lose stock has been absorbed and the news flow from now will only get better ,,, i feel 20 p tgt price is within reach over 6 months

[capricious] 24/11/2013 20:57

I wonder if Hydrodec will continue to get the stewardship payment via the joint venture in Australia without reapplying.

According to SouthernOil's website they get the top payment (cat 1 out of 7) from the stewardship programme, although their site says they are the only ones in Australia to get this, I think they need to update the site.

Hydrodec get the same cat 1 payment on their relatively low throughput at Young, the plan to co-locate is to de-risk operations, including the risk of losing said payment. I'd hope that this would not be the case, and they get the full benefit (0.50c/l) on the enlarged capacity (60ml/y).

[capricious] 23/11/2013 17:17

Thanks for the info.

I think they are also trying to move some debt into dollars, to reduce interest.

[tongosti] 23/11/2013 11:23

Also, Merrill kept their bur rating on ESSAR yesterday but lowered their price target by roughly 10%. Essar also announced yesterday that they intend to qualify for FTSE inclusion by increasing free float level to 25%. This is good in my view as it will give them greater visibility and profile

[tongosti] 23/11/2013 11:13

At the Holding level, net debt is $8.7bn. Worrying thing is D/E is about 280x which is astronomical. This is the reason why Essar is loss making as they have a huge interest rate bill to pay even though their EBITDA is about $1bn. As a result, their partnership with HYR is not likely to make a substantial difference to their profit profile and balance sheet. Hence my concern on this one.

[capricious] 23/11/2013 10:33

Agree, I just saw the same thing with regards to Essar. Do you know the debt per subsidiary or whether the Stanlow refinery is profit making?


I imagine an incentive for a deal is to improve their operating margins.

I don't know that I'd recommend spending capital in India, as opposed to a pure licence deal, but it's good that they might have a partner with links to that part of the world.

[tongosti] 23/11/2013 10:04

Cheers Cap. At this point in time I am particularly focused on how HYR will execute things in the UK. The reason i am saying this Cap is. Because I did go through the financial statements of Essar and that company has been a loss maker for the past few years. I hope they will manage to tun things around and prove to be a reliable and worthy partner for us otherwise ...On the Australian relocation front, the move is subject to permit and I hope we get it confirmed soon but I don't know how long this will take as the company did not elaborate further on this point.

[capricious] 23/11/2013 09:45

I've been following Hydrodec for some while, the share price reaction, the kind of news flow and media interest, it's coming back to how it was, just before the recession.

There have been some setbacks, and many were disappointed about Japan, which overshadowed the potential in their main market, the US. Since then we have seen them forge a great relationship to expand that market, served a blinder to bootstrap plans for General/Industrial oil production, in a new market location. If that wasn't enough, they set in motion plans to address scale in Australia.


It takes time for the build up of media interest to filter into people sights, it will get there.



Thanks Tongosti

[tongosti] 23/11/2013 09:37

Thanks Cap. Patience is a must in this game if you want to be successful. I have been holding QFI for two years and only in the last while things are moving incredibly fast and nicely. HYR have got a very exciting potential and at current prices is - in the words of Ben Graham and Seth Klarman - a reasonable margin of safety. Onwards and upwards fellas!

[capricious] 23/11/2013 09:27

TA on shares that don't garner significant daily volume, can be a problem... saying that, it certainly looks like a 'flag and pennant' is forming nicely, with a breakout on the upside.


Putting TA aside, and from the posts above, we have just had a large number of shares come on the market, immediately being in the money, and very few have offloaded. The reason, there is there is so much long term potential.

Certainly helps when there are articles like this, with Hydrodec's name mentioned


You probably need to subscribe - basically there were 10 short sections highlighting the companies with what they considered the most potential. Recommendation - Long term buy

Title: Game Changers
Allan Matthews and the IC team find the aim companies with 10 bagger innovations.



Title says it all.

[mattboxy] 22/11/2013 20:11

Any chart people out there isn't this a flag thingy approaching a breakout???