Global Energy Ventures Limited

GEV Details

Global Energy Ventures Limited (ASX: GEV) is an Australian company focused on developing compressed natural gas (CNG) through CNG Optimum marine gas transport solutions.

Result Performance for the Year Ended 30 June 2021 (FY21)

• The company’s loss from ordinary activities after tax attributable to members for the period stood at $3.09 million in FY21, as compared to loss of $2.89 million in FY20.
• At the end of the period, net tangible assets stood at 1.43 cents in FY21 compared to 0.78 cents in FY20. No dividend was declared during the period.
• The Group had cash and cash equivalents of $6.56 million in FY21 compared to $3.14 million in FY20 and Intellectual Property of $5.80 million in FY21 versus $6.21 million in FY20. The Group had no debt (2020: Nil).

Statement of Profit or Loss (Source: Company Reports)

Key Update:

• On 27 October 2021, the company informed the market that it would develop a green hydrogen export project in the Tiwi Islands, Northern Territory. The capacity will be up to 8 GW (the Tiwi Hydrogen Project), producing up to 100,000 tonnes per annum of green hydrogen for export into the Asia-Pacific region.

Outlook:

As per the reports, the company is well-positioned to support the push towards an energy transition to 2050. The CNG Optimum ship delivers the near-term benefits of natural gas with a lower cost of development with a material reduction in emissions through to 2030. In addition, the C-H2 Ship will support the strategies being set to decarbonise heavy emitting industries, including hydrogen, by 2030 and beyond.

Risks:

The company is susceptible to specific risks such as interest rate risk, foreign currency risk, liquidity risk and credit risk.

Stock Recommendation:

The company delivered +28.57% and +48.35% in six months and one year, respectively. It is presently trading close to its 52-weeks high price of $0.150. On TTM basis, its EV/Sales stand at 270.4x, which is much higher than the industry median (Oil & Gas) of 28.3x, indicating overvaluation.

Considering the facts above, subdued FY21 performance, and current trading level, investors should book profits at the current levels. Hence, we give “Sell” recommendation on the stock at the current market price of $0.145 as of 27^th October 2021 (Time: 11:46 AM (GMT+10), Sydney, Australia).

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period) 

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

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