New York, NY / ACCESSWIRE / July 16, 2014 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has initiated coverage on Aemetis, Inc. (NASDAQ: AMTX).
“We are intrigued by the prospects of the company as it is an international renewable fuels and biochemicals company that focuses on the development and deployment of patented industrial biotechnology to convert first generation ethanol and biodiesel plants into advanced second generation biorefineries. Through two plants in North America and India, Aemetis has combined production capacity of 110 million gallons per year. We look forward to following the company’s progress and are initiating coverage with a price target of $26.11 per share.”
Additional investment highlights are as follows:
- Advantageous Strategic Locations. Aemetis owns and operates plants that are strategically located to cost effectively serve three large target markets: renewable fuels, food & feed, and biochemicals. In the U.S., the company owns an ethanol plant in Keyes, CA that is close to major transportation hubs, providing easy access to key domestic and international feedstock markets. California is a 1.3 billion gallon per year (BGY) ethanol market that provides favorable economics for biofuel producers, including higher selling prices and comparatively advantageous feedstock shipping costs. Wet distillers grains (WDG) represents another $120 million market in the state, due to population growth and increasing demand for meat and milk. Given its favorable location, the Keyes plant sells all of its ethanol and distillers grains (an ethanol by-product) within 80 miles of its location. In India, Aemetis’ Kakinada plant benefits from a large local supply of waste fats and oils, which are the lowest cost feedstock for producing renewable fuels. In addition, as government subsidies for diesel are phased out, biofuel producers such as Aemetis should benefit.
- Favorable Industry Dynamics. The biofuels market is supported by several tailwinds. On the demand side, U.S. environmental regulations mandate the use of renewable fuels, with the Environmental Protection Agency (EPA) requiring gasoline to use a certain amount of ethanol and other biofuels. The renewable fuel standard (RFS) of the Energy Independence and Security Act of 2007 mandates increasing consumption of biofuels. Ethanol demand is also driven by higher oil prices, which allows refiners to increase the use of the biofuel to moderate gasoline price increases. Development of the biofuel industry would also aid in increasing energy independence of the U.S. as well as benefiting the economy, especially in rural areas where new sources of jobs are scarce. On the supply side, there are 211 ethanol plants in the U.S. with annual capacity of 15.2 BGY. However, new construction of additional facilities has been slow, with only four plants representing aggregate annual production capacity of 158 million gallons under construction or expansion.
- Next Generation Technology. To develop and commercialize advanced biofuel technology, Aemetis operates an R&D lab and was awarded five patents related to enzyme and microbe technology. In addition, the company was the first to receive an advanced biofuel pathway from the EPA, indicating its interest in adopting advanced fuel and specialty chemical technology. We look forward to technological announcements that should improve Aetemis’ profitability while planting the seeds for its long-term future.
The report is available here: AMTX Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will also be available on these platforms.
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About Aemetis, Inc.
Aemetis, Inc. operates as an international renewable fuels and specialty chemical company focused on the production of advanced fuels and chemicals, as well as the acquisition, development, and commercialization of innovative technologies that replace traditional petroleum-based products and convert first-generation ethanol and biodiesel plants into advanced biorefineries. It operates in two reportable geographic segments, North America and India. The company owns and operates a biodiesel plant in Kakinada, India; and an ethanol plant in Keyes, California. Aemetis, Inc. sells biodiesel and glycerin to resellers, distributors, and refiners through its sales force and independent sales agents, as well as to brokers who resell the product to end-users. It also provides ethanol, wet distiller grains, corn oil, and condensed distillers soluble. The company was formerly known as AE Biofuels, Inc. and changed its name to Aemetis, Inc. in November 2011. Aemetis, Inc. was founded in 2005 and is headquartered in Cupertino, California.
For more information, please go to http://www.aemetis.com/.
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit http://www.seethruequity.com/.