Hydrogen Utopia International PLC (LSE:HUI, OTCQB:HUIPF) shares took off on Tuesday following a bullish research report from Progressive Equity Research.
Progressive touted Hydrogen Utopia’s strategic acquisition of a 49% stake in medicinal cannabis company Ohrid Organics as a “potential innovative source of financing without having to resort to a dilutive share issue”.
The acquisition “should facilitate the development and application of Hydrogen Utopia’s pioneering waste plastic to hydrogen technology”, said Progressive, noting that Ohric Organics has a high-quality product that is attracting significant interest.
Ohrid Organics’ North Macedonian subsidiary is on track to achieve profitability in the first quarter of 2024, with a projected EBITA of approximately €6 million in 2024 and €10 million in 2025.
Dividends should start flowing through to Hydrogen Utopia, who will also be able to borrow on the back of this investment, Progressive surmised.
“There is also a possibility of funding from local banks in North Macedonia that recognise the potential of the country’s export of medical cannabis,” researchers noted. “This dynamic cannabis market has the potential to become the fuel for the engine driving (Hydrogen Utopia’s) hydrogen plant developments.”
Progressive was also bullish on recent changes to Hydrogen Utopia’s board, noting that new chairman Simon Mann has significant contacts, especially in Africa, Turkey, Ukraine and the US, which should prove helpful in moving the business forward.
Hydrogen Utopia’s share price subsequently added more than 62% to 6.5p with a market capitalisation of £26 million.