Quadrise Fuels International — Progress on bioMSAR development

Quadrise (AIM: QED)

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Research: Industrials

Quadrise Fuels International — Progress on bioMSAR development

Quadrise made significant advances in the development of bioMSAR, its biofuel variant of MSAR during H122. However, progress on the three key trial programmes with potential customers was slower than management had expected because of factors outside the company’s control. Nevertheless, management notes that Quadrise has the cash resources to progress the ongoing trial programmes to revenue generation, which it expects will commence in calendar H222 (CY H222), subject to the successful conclusion of commercial project agreements.

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Industrials

Quadrise Fuels International

Progress on bioMSAR development

Alternative energy

Spotlight - Update

29 March 2022

Price

1.51p

Market cap

£21m

Share price graph

Share details

Code

QFI

Listing

AIM

Shares in issue

1,406.9m

Net cash at end December 2021

£5.6m

Business description

Quadrise is the innovator, supplier and global licensor of disruptive oil technology that produces a synthetic, enhanced heavy fuel oil called MSAR and a biofuel called bioMSAR. The technology provides a low-cost and cleaner fuel for marine, power and industrial applications.

Bull

Adoption of MSAR improves economics of refinery production and upstream operations.

Adoption of MSAR improves profitability of upstream operations and reduces costs and emissions in industrial, marine bunker and power markets,

bioMSAR gives better CO2 and cost savings than existing biofuels.

Bear

Economics of adoption dependent on oil product spreads.

Ability to progress trials adversely affected by COVID-19-related travel restrictions.

Target markets slow to adopt new technologies.

Analyst

Anne Margaret Crow

+44 (0)20 3077 5745

Quadrise Fuels International is a research client of Edison Investment Research Limited

Quadrise made significant advances in the development of bioMSAR, its biofuel variant of MSAR during H122. However, progress on the three key trial programmes with potential customers was slower than management had expected because of factors outside the company’s control. Nevertheless, management notes that Quadrise has the cash resources to progress the ongoing trial programmes to revenue generation, which it expects will commence in calendar H222 (CY H222), subject to the successful conclusion of commercial project agreements.

Historical performance

Year
end

Revenue
(£m)

EBITDA
(£m)

PBT
(£m)

EPS
(p)

DPS
(p)

P/E
(x)

06/18

0.0

(3.3)

(3.5)

(0.37)

0.00

N/A

06/19

0.0

(2.8)

(3.0)

(0.32)

0.00

N/A

06/20

0.0

(3.0)

(3.3)

(0.32)

0.00

N/A

06/21

0.0

(2.8)

(2.8)

(0.23)

0.00

N/A

Source: Company accounts

Delays to key trial programmes

After experiencing delays to each of the three key trial programmes during H122, which are discussed in the body of this note, management now expects the potential roll-out to be as follows: 1) Quadrise and MSC Shipmanagement could potentially start on-vessel, commercial-scale trials by the end of CY22. These trials will take around nine months to complete; 2) production drilling should commence at a site in Utah this summer, potentially leading to client site trials in CY H222; and (3) an industrial-scale trial at a site of a potential Moroccan customer should commence in CY Q222 and a larger commercial-scale trial at another one of the same customer’s sites later in CY 2022.

Cash runway beyond CY H222

Quadrise is still pre-revenue. Stripping out share option and exceptional charges, operating losses were flat year-on-year during H122 at £1.4m. Free cash outflow increased by £0.1m to £1.4m. The group had £5.6m in cash and no debt or convertible securities at end H122. This represents c 23 months of costs (excluding those related to projects) at £240k/month. This gives a cash runway to progress the ongoing trial programmes into CY 2023, by which time the company could be generating revenues, subject to the timely completion of commercial project agreements.

Valuation: Modest adoption transformational

We are not presenting forecasts at this stage. However, as a rough guide, based on data from the company, our scenario analysis calculates that even modest adoption of MSAR could generate material revenues and take the company to sustainable profitability. For example, adoption across only 9% of MSC’s global fleet could generate around $80m in licence revenues and require minimal capex.

Status of trial programmes

bioMSAR – biofuel variant of MSAR

While the original MSAR is more environmentally friendly than heavy fuel oil (HFO), Quadrise went a step further with the launch of bioMSAR in December 2020. Results from tests on five tonnes of bioMSAR using a medium speed four-stroke Wärtsilä diesel engine by VTT in Finland, which were announced in August 2021, gave average CO2 savings of 26% on a well-to-wake basis compared with conventional diesel. Part of the CO2 reduction was attributable to an increase in engine efficiency of up to 7%. This result is better than the CO2 savings achieved with existing biofuels, which are typically in the region of 10–15%. NOx emissions were lower than for HFO and comparable to diesel. Smoke and particulate levels were very low, as were unburned hydrocarbons emissions, due to efficient fuel combustion.

In January 2022, Quadrise announced that further tests carried out on an engine at Aquafuel Research that had been modified to simulate larger, high-compression engines like the low-speed two-stroke engines used in the marine sector set showed that engine efficiency can be increased by over 13% by advancing injection timing, further reducing fuel consumption and CO2 emissions. Typically, higher engine efficiencies result in increased combustion temperatures and NOx emissions. However, it was possible to reduce the inlet air temperature with bioMSAR to the same level as with diesel, resulting in NOx levels around 45% lower than diesel fuel.

Quadrise plans to conduct further testing of bioMSAR with Aquafuel during calendar 2022 to fully define efficiency and emissions optimisation. Quadrise has jointly submitted an international patent application for bioMSAR with Nouryon, the supplier of surfactants used in the production process.

Marine programme with MSC Shipmanagement

Under a joint development agreement (JDA) with Quadrise, MSC Shipmanagement is to carry out a letter of no objection (LONO) trial of MSAR on representative commercial vessels in MSC's global fleet deploying either large MAN ME and/or Wärtsilä/WinGD Flex two-stroke engines. Originally, Quadrise expected that the two parties would carry out high-level scoping and feasibility activities and define a project roadmap during H1 CY21 ahead of one or more on-vessel trials commencing in Q4 CY21. However, the shipping line is an early adopter of environmental technology and currently uses 850,000 tonnes of biofuel annually, making it one of the largest consumers of biofuel in the marine sector. Consequently, as more details of bioMSAR’s performance were released, which was after the original agreement had been signed, MSC decided it wanted to fast-track Quadrise’s biofuel option. This decision has contributed to delays in the preparatory phase. The preparatory phase has also been held up by lack of availability of engine manufacturer personnel to review the initial results from the bioMSAR trials because of coronavirus issues and their engagement in the testing of multiple new low-carbon fuels, of which bioMSAR is one of the options.

Quadrise continues to work with MSC to finalise the LONO programme and commercial terms for the supply of bioMSAR. Assuming that these discussions conclude successfully, Quadrise expects preparations for the LONO trial to start in CY Q222, ahead of the trial starting by end CY 2022. At the time of the FY21 results in October, management believed that the earliest the 4,000-hour LONO trial would start would be mid-CY22. Management expects that the LONO trial will take around nine months to complete. As part of the LONO preparation, Wärtsilä Switzerland has scheduled tests of MSAR and bioMSAR in its optical combustion chamber for late CY Q222 followed by testing of bioMSAR on an injector wear rig at end CY Q322. These land-based tests do not need to complete successfully before preparations for the LONO can commence.

Converting oil from oil sands in Utah

Quadrise received crude oil samples from the Tar Sands II site in the Uinta Basin, Utah, where Greenfield Energy purchased an initial 10% stake, in August 2021. The subsequent tests confirmed that the sample could be converted to both standard MSAR and the bioMSAR variant for potential use in power and marine end-user applications domestically and internationally. Quadrise is currently working with TomCo Energy, which is the parent company of Greenfield Energy and with energy services company Valkor Technologies, which is a stakeholder in TomCo, to secure commercial opportunities for MSAR and bioMSAR in Utah. In February, TomCo announced that Greenfield had received the permits required to enable it to start drilling three exploratory wells in March.

In addition, Valkor is currently working with one of its clients elsewhere in the Uinta Basin which has started exploration drilling at its site and expects to start production drilling there this summer, assuming that it receives the necessary permits. This would result in oil being available for on-site trials converting oil to bioMSAR and MSAR during CY H222, potentially resulting in commercial sales by the end of calendar 2022, subject to commercial agreement. These timescales are similar to those given by Quadrise last October. Quadrise is confident that it will be able to convert oil from this alternative site to bioMSAR and MSAR because it is located close to the Tar Sands II site and the oil extracted will be from wells and therefore have much less sand in it.

Industrial applications with partner in Morocco

Quadrise continues to work with an international chemicals and mining group headquartered in Morocco, which is considering using MSAR as a substitute for HFO in some of its kilns. Quadrise had hoped to conduct a pilot trial at one of its partner’s sites (site A) in Morocco in March 2020, but COVID-19 restrictions meant that Quadrise’s personnel were not able to gain access to the site and successfully complete the trial until October 2020. An industrial-scale trial at a different site (site B) owned by the same partner has been delayed from early CY Q121 because of a combination of site access restrictions and a recent internal management reorganisation at the client. The new client team has yet to sign an updated agreement, pushing back the industrial-scale trial from CY Q122, as per Quadrise’s expectations in October, to CY Q222. Once the site B trial has completed, Quadrise intends to deliver the results and a feasibility study for MSAR use at site A to the client, so the commercial-scale trial at site A has been delayed from CY Q122/Q222 as anticipated last October to later in CY 2022, depending on the client’s maintenance programme. Assuming the trials complete successfully, management intends to conclude a commercial supply agreement covering one or more of the client’s sites in Morocco during H222, potentially leading to commercial deliveries by the end of calendar 2022.

Management changes

Executive chairman Michael Kirk retired at the group’s AGM in November 2021 and non-executive director Laurie Mutch became interim chairman while the group looked for Michael’s successor. On 1 February 2022, Andy Morrison became non-executive chairman. Andy began his career at Royal Dutch Shell, where he spent 17 years in its oil products (including bunker fuel), lubricants and speciality chemicals divisions. His roles there included VP positions in sales, marketing, trading and strategy, spanning several continents. After leaving Shell, Andy held senior positions at BG Group and BOC Group in corporate strategy and new business development respectively. Since 2007 Andy has been involved with a number of junior listed companies including roles as chief executive officer of Xtract Energy and Silvermere Energy and non-executive director of Kanabo Group and Ondo InsurTech.

Following the resignation of former COO Mark Whittle in July 2021, Phil Hill was appointed to the post, which is not a board position, in January 2022. Philip is a chartered chemical engineer with more than 20 years of experience in fuels and chemicals manufacturing, sales and distribution for BP and INEOS. He has significant technical and commercial experience in production operations, technology licensing, asset optimisation, project development and strategic planning. Prior to joining INEOS, he managed and held directorships in a number of BP's joint ventures, where he worked to develop and license gas-to-liquids technology for downstream and synthetic biofuel applications, and to supply jet fuel to the airline industry.

Valuation: Modest adoption transformational

Since Quadrise has yet to generate commercial revenues, its value resides in the potential future cash flows generated from volume production of MSAR and bioMSAR. As there is substantial uncertainty on when the various projects Quadrise is working on with its partners will progress to commercialisation, precluding the preparation of estimates, we presented a high-level scenario analysis in our November note based on data from the company, which we understand is derived from the numerous detailed case studies it has carried out for prospective clients. The analysis concluded that adoption across only 9% of MSC’s global fleet could generate around $84m in licence revenues and $13.8m in EBITDA and be transformational for Quadrise. The other two projects closest to commercialisation are smaller.

Exhibit 1: Financial summary

£000s

2018

2019

2020

2021

30-June

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

9

22

0

17

EBITDA

 

 

(3,284)

(2,780)

(3,006)

(2,752)

Operating Profit (before amort. and except.)

 

 

(3,514)

(3,010)

(3,178)

(2,887)

Amortisation of acquired intangibles

0

0

0

0

Exceptionals

0

0

(1,199)

(1,266)

Share-based payments

(53)

(154)

(474)

(303)

Reported operating profit

(3,567)

(3,164)

(4,851)

(4,456)

Net Interest

11

(3)

(139)

46

Profit Before Tax (norm)

 

 

(3,503)

(3,013)

(3,317)

(2,841)

Profit Before Tax (reported)

 

 

(3,556)

(3,167)

(4,990)

(4,410)

Reported tax

294

184

147

150

Profit After Tax (norm)

(3,209)

(2,829)

(3,170)

(2,691)

Profit After Tax (reported)

(3,262)

(2,983)

(4,843)

(4,260)

Minority interests

0

0

0

0

Net income (normalised)

(3,209)

(2,829)

(3,170)

(2,691)

Net income (reported)

(3,262)

(2,983)

(4,843)

(4,260)

Average Number of Shares Outstanding (m)

862.2

888.7

982.8

1,175.4

EPS - normalised (p)

 

 

(0.37)

(0.32)

(0.32)

(0.23)

EPS - diluted normalised (c)

 

 

(0.37)

(0.32)

(0.32)

(0.23)

EPS - basic reported (c)

 

 

(0.38)

(0.34)

(0.49)

(0.36)

Dividend per share (p)

0.00

0.00

0.00

0.00

BALANCE SHEET

Fixed Assets

 

 

3,885

3,654

3,506

3,384

Intangible Assets

2,924

2,924

2,924

2,924

Tangible Assets

961

730

582

460

Current Assets

 

 

2,600

1,396

2,766

7,279

Stocks

61

61

61

61

Debtors

188

169

213

117

Cash & cash equivalents

2,229

1,060

2,380

7,006

Other

122

106

112

95

Current Liabilities

 

 

(400)

(288)

(2,243)

(276)

Creditors

(400)

(288)

(198)

(276)

Tax and social security

0

0

0

0

Short term borrowings

0

0

0

0

Convertible securities

0

0

(2,045)

0

Long Term Liabilities

 

 

0

0

0

0

Long term borrowings

0

0

0

0

Other long-term liabilities

0

0

0

0

Net Assets

 

 

6,085

4,762

4,029

10,387

Minority interests

0

0

0

0

Shareholders' equity

 

 

6,085

4,762

4,029

10,387

CASH FLOW

Op Cash Flow before WC and tax

(3,284)

(2,780)

(3,072)

(2,752)

Working capital

298

(77)

(140)

191

Exceptional & other

0

130

65

7

Tax

294

184

147

150

Net operating cash flow

 

 

(2,692)

(2,543)

(3,000)

(2,404)

Capex

(135)

(24)

(24)

(29)

Acquisitions/disposals

0

0

0

0

Net interest

11

(3)

1

46

Equity financing

0

1,401

2,343

6,513

Dividends

0

0

0

0

Net Cash Flow

(2,816)

(1,169)

(680)

4,126

Opening net debt/(cash)

 

 

(5,045)

(2,229)

(1,060)

(2,380)

FX

0

0

0

0

Other non-cash movements

0

0

2,000

500

Closing net debt/(cash)

 

 

(2,229)

(1,060)

(2,380)

(7,006)

Source: Company accounts

General disclaimer and copyright

This report has been commissioned by Quadrise Fuels International and prepared and issued by Edison, in consideration of a fee payable by Quadrise Fuels International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

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Frankfurt +49 (0)69 78 8076 960

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Germany

London +44 (0)20 3077 5700

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New York +1 646 653 7026

1185 Avenue of the Americas

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Quadrise Fuels International and prepared and issued by Edison, in consideration of a fee payable by Quadrise Fuels International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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AAC Clyde Space — Acquisition of Spacemetric

Industrials

Argent Industrial — Cash flush

Industrials

Severfield — Poised for expansion

Research: Investment Companies

Invesco Asia Trust — Picking quality value stocks

Despite the notable setback in Asian markets during Q122, Invesco Asia Trust (IAT) continues to generate a double-digit annualised NAV total return (c 11% over the past 10 years), supported by consistent income. It has continued to pay a regular six-monthly dividend equivalent to 2% of NAV (4% per year). In January 2022, the fund management team was enhanced when Fiona Yang was appointed co-manager alongside Ian Hargreaves, who has run the portfolio since 2011 (from 2015 as a sole manager). IAT’s team targets double-digit annualised returns from each portfolio holding over a rolling three-year period.

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