Midwest Energy Emissions Corp., should achieve strong double-digit topline growth in this year," reported Zacks Small-Cap Research analyst Steven Ralston in a May 22 research note.
"We expect revenues to increase by at least 35% in 2023," Ralston wrote. "Management expects annual revenue growth of approximately 50% in 2023."
Compelling Investment Opportunity
This U.S.-headquartered company offers investors a significant potential return of about 175% currently. This is shown via the gap between Zacks' price target on ME2C of CA$1.10 per share and its current price of CA$0.40 per share.
Three Pillar Approach
Ralston highlighted that ME2C is pursuing three general strategies to keep growing revenue. Given its success in 2022, it is well poised to continue its upward trajectory in this regard.
1) Focusing on core technologies: Revenue from licenses and recurring sorbent sales related to its patented mercury capture process have been driving ME2C's recent growth. The firm aims to continue expanding this business line by continuing to enforce its successful patent litigation effort against coal-fired EGUs.
ME2C is looking around the globe for new customers. Recently, it engaged a Hong Kong consulting company to garner licensing agreements for ME2C's SEA (Sorbent Enhancement Additive) technology for reducing mercury emissions and sorbent product supply contracts in Southeast Asia.
Just last month, ME2C landed a new three-year supply contract, valued at about US$9 million ($9M), with an existing licensee.
Also, to meet an anticipated rise in demand for electricity from domestic coal-fired electric generating units, the company proactively built a new manufacturing and distribution facility in Texarkana. Its capacity can support US$100M in annual product supply revenues.
2) Enforcing patent protection: ME2C's second tack is to keep protecting its patented technology by seeking compensation from refined coal operators that have allegedly unlawfully utilized its SEA technology.
Additionally, an estimated 29 power plants with multiple refined coal-fired electric generating units are still using ME2C's patented technologies without a license. It is expected that resolution of the current litigation will push these entities to seek either a license or supply agreement with ME2C.
3) Expanding its product line: ME2C is working to develop additional technologies, such as one to extract rare earth elements, on which it is making progress, and another to remediate wastewater from coal-fired power plants.
As for its rare earth element extraction efforts, Ralston relayed that ME2C "management hopes to conduct a commercially viable field test once the laboratory work is successfully completed."
Also, in his research note, Ralston reported some of ME2C's latest developments.
In April 2023, the company received conditional approval to list its common shares on the TSX Venture Exchange. Management expects its ticker symbol to be MEEC.
Last month, ME2C reported full-year 2022 (FY22) financial results, noting year-over-year increases in revenue and sorbent sales. Total revenue in FY22 was US$21.62M, up 66.2% from US$13.01M in 2021. Sorbent product sales rose 87.6% between 2021E and 2022E to about US$20.64M from US$11M.
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- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Midwest Energy Emissions Corp., a company mentioned in this article.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- The following companies mentioned in this article are billboard sponsors of Streetwise Reports: ME2C Environmental. Click here for important disclosures about sponsor fees.
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Disclosures for Zacks Small-Cap Research, Midwest Energy Emissions, May 22, 2023
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