Highlights:
- Arrowhead is updating its coverage on Aduro with a fair value bracket of CAD 3.8 to CAD 5.3 per share (share price on November 06, 2023: CAD 0.95) based on the Blended Valuation (Relative Valuation and Discounted Cash Flow) method.
- Aduro Clean Technologies (CSE: “ACT”) is an Ontario-based listed entity and an early-stage platform technology company that pioneered the development of a flexible, disruptive platform called Hydrochemolytic™ Technology (HCT). It is also listed on the OTCQB under the ticker “ACTHF” and on the Frankfurt Stock Exchange under “9D50”.
- HCT is a technology platform that transforms large, stubborn molecules of low value into smaller, lighter molecules of higher value at a relatively low temperature and cost. Aduro’s HCT process can be reconfigured to unlock and maximize the value from different families of waste plastics with different value propositions.
- The company’s technology is protected by eight patents (seven granted and one pending) and has received CAD 1.1 mn out of the total approved grant of CAD 2.3 mn for research. The company has a dedicated R&D laboratory and research collaboration with Western University.
- Aduro plans to generate its revenue in the form of licensing fees and royalties by monetizing its HCT technology. It aims to commercialize HCT from lab-scale batch reactors into bench-scale, small-scale continuous-flow processing units. This will enable it to work with industry partners and expand significantly without needing major capital. In the long term, the company also aims to expand its business model through its ‘own & operate’ model.
- The company has a strong outlook, with recurring revenue expected to reach CAD 95.0 mn in FY 2027. Accordingly, the adjusted EBITDA is expected to grow sharply to CAD 78.1 mn in FY 2027.
- Recently, the company added two new participants to its Customer Engagement Program (CEP), aimed at cultivating partnerships with key industry stakeholders to enable them to gain in-depth knowledge about HCT, cater to their specific waste management needs and collaborate on targeted future commercial projects. These participants will contribute funding to Aduro for further experimentation and for advancing the HCT technology.
- In September 2023, Aduro appointed Mr. Eric Appelman as its Chief Revenue Officer to leverage his experience in the waste plastic industry, along with his insights into customer needs and sector dynamics. Further, his understanding of the European market will be advantageous for Aduro in gaining access to key service providers, European grants, strategic partners and research collaborators.
- Aduro has partnered with Prospera – a Canadian heavy oil operator – to develop, build and supply a pre-commercial pilot plant to convert low-API bitumen into higher-value products, which is expected to generate a monthly fee of CAD 25,000, with total fees capped at CAD 125,000.
- The company has also partnered with Chemelot Innovation and Learning Labs (CHILL) to carry out an experimentation program at the Brightlands Chemelot Campus in Geleen in the Netherlands to develop HCT and demonstrate the conversion of waste plastics to useful feedstock for chemical processes on a tons per day scale.
