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Research: Consumer
MeaTech’s Belgian subsidiary, Peace of Meat, has signed a joint development agreement with ENOUGH, a leader in the field of mycoprotein. This should help MeaTech to accelerate its go-to-market strategy for hybrid products and demonstrates that the company is successfully moving from proof-of-concept towards scaling up and commercialisation. Alternative meat demand is booming and cellular agriculture could represent a solution to the increasing demand for protein. Cellular agriculture has the potential to significantly disrupt both meat and non-meat markets over the next few decades.
MeaTech |
Developing hybrid products
Consumer |
Spotlight - Update
30 May 2022 |
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MeaTech is a research client of Edison Investment Research Limited |
MeaTech’s Belgian subsidiary, Peace of Meat, has signed a joint development agreement with ENOUGH, a leader in the field of mycoprotein. This should help MeaTech to accelerate its go-to-market strategy for hybrid products and demonstrates that the company is successfully moving from proof-of-concept towards scaling up and commercialisation. Alternative meat demand is booming and cellular agriculture could represent a solution to the increasing demand for protein. Cellular agriculture has the potential to significantly disrupt both meat and non-meat markets over the next few decades.
Hybrid products likely to be first to market
Hybrid products contain plant-based protein mixed with cultured fat. Management believes hybrid products may come to the market sooner than pure cultivated meat products, given the latter present a significantly greater technical challenge to achieve. Hybrid products contain cultured fat and still require regulatory approval, meaning commercialisation is likely to be at least two years away. Cultured meat is currently only approved for sale in Singapore, and MeaTech believes regulatory approval will take about two years in the United States, and possibly slightly longer in Europe.
Mycoprotein
Mycoprotein is a fungal or single-cell protein, derived from fungi for human consumption. It is high in fibre and low in saturated fat, and has a meat-like texture. The best-known mycoprotein is sold under the Quorn brand. ENOUGH is a B2B ingredients company, which plans to launch its ABUNDA mycoprotein in mid-2022. ENOUGH’s planned flagship pilot plant in the south of the Netherlands will not be far from Peace of Meat’s planned R&D facility and pilot plant.
Valuation: Currently no listed peers
Due to MeaTech’s start-up nature (see our initiation), financial forecasts cannot be made with any certainty and management does not expect to report positive revenues or profits in the short to medium term. MeaTech had $19.2m in net cash at end 2021, which we expect it to utilise during 2022, thus implying a need for further financing. Uncertainty is compounded by regulatory risk, as cultured meat is not yet approved in most jurisdictions. As MeaTech is the first listed cultured meat company, it has no direct peers, but it offers investors a way to play the alternative meat market.
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Research: Financials
Bancassurance advisory and service platform JDC Group (JDC) reported strong Q1 results. After large client wins in the last few years, most notably Provinzial and Versicherungskammer Bayern (VKB), JDC is now slowly getting into the execution phase of these large contracts. Nevertheless, the number of transfers of insurance contracts to its platform and hence the contribution in terms of revenues from these clients will be limited this year. Based on 2023e consensus EV/sales and EV/EBITDA, the valuation does not seem demanding compared to platform peers.
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