RBC maintained an outperform rating on AFC Energy PLC (AIM:AFC, OTC:AFGYF), reflecting confidence in the company's growth strategy following its latest capital markets event (CME).
“The CME showed the constructive steps taken to formulate and implement a go-to-market strategy for AFC’s fuel conversion business,” said analysts. “Looking ahead, the priority is on ‘getting the reactors right’ – as stated by management – and confirming deployment partners which should help unlock the value of that business.”
AFC Energy has set expectations for sales of £6 million in 2024 and £12 million in 2025, a significant increase from £200,000 in 2023.
RBC highlighted AFC’s capital-light business model, with Dunsfold serving as the core product development facility while outsourcing production to partners like Illuming.
The CME showcased AFC’s efforts to replace diesel generators with hydrogen-powered alternatives. AFC targets key markets, particularly the construction sector, which is a significant opportunity for hydrogen power generators.
“We see the growth case of AFC supported by tightening emissions regulations as well as growing grid constraints, which we expect will drive substantial growth in demand for
clean stationary power solutions in the coming decade.
“AFC is rightly focused on the construction sector, which we see as one of the obvious end-markets addressable today, alongside data centres and EV charging.”
RBC has an outperform rating on the stock with a 40p price target against a 19.92p publication price.