Clean TeQ Water Ltd (ASX:CNQ) has maintained its valuation of A$1.83 per share in the base case and A$2.37 per share in the bull case from Pitt Street Research.
Pitt Street believes that CNQ is well placed to benefit from the growth in the water technology market as it has a strong project pipeline as well as high operating leverage.
CNQ shares closed yesterday at A$0.55 per share with a market cap of approximately A$24.79 million.
Following are excerpts from Pitt Street Research’s report:
CNQ’s win of bore treatment contract is a step forward
CNQ was recently awarded a contract with PWC to deliver a water treatment plant to one of the 72 remote communities in the Northern Territory of Australia.
Valued at A$5 million, the contract is amongst the largest in CNQ’s water history in terms of contract value.
The company will use its ion exchange resin technology to design and manufacture the treatment plant.
The contract win is likely to provide more business opportunities for the company to deliver larger and more complex plants in a growing groundwater treatment market.
NematiQ achieves manufacturing milestone for Graphene membrane
CNQ’s 100% owned subsidiary NematiQ achieved a major milestone in March 2022 as it started manufacturing graphene membranes on an industrial commercial-scale roll-to-roll coating machine.
The membranes offer customers significant benefits in operation over conventional polymeric nano-filtration products.
Valuation range remains A$1.83-2.37 per share
We reiterate our valuation of the company at A$1.83 per share in the base case and A$2.37 per share in the bull case, using a blended DCF/RV model.