PureCycle Technologies Stock: Rising Upside
MiguelMalo PureCycle Technologies, Inc. (NASDAQ:PCT) released company updates and financial results for the fourth quarter ended December 30, 2022 after the market close Wednesday, March 15, 2022. Following the announcement, shares rose 39.4% from $4.77 at the close on March 15 to $6.65. PureCycle is seeking to implement a technology to produce recycled polypropylene, which is an industrial good with specific properties such as tear strength combined with good chemical, heat and resistance. The company plans to ramp up production of high purity recycled resins in pellets by the end of April, meaning that producing salable pellets is no longer just a project. The start of this phase should give the stock price another strong move higher after its probable announcement. Purecycle Technologies also announced its first polypropene recycling plant in the Belgian port of Antwerp-Bruges while developing a joint venture agreement with Mitsui & Co., Ltd. and plans with SK Geo Centric Co. Ltd. The South Korean and South Korean plants are expected to come on the same level.
ที่ตีพิมพ์ : 2 เดือนที่แล้ว โดย Kerry Williams ใน
What Happened to PureCycle Technologies Stock Following Corporate Update and Financial Results for Q4 2022?
PureCycle Technologies, Inc. (NASDAQ:PCT), an Orlando, Fla.-based company seeking to implement a technology to produce recycled polypropylene, released company updates and financial results for the fourth quarter ended December 30, 2022 after the market close Wednesday, March 15, 2022.
Following the announcement, PureCycle Technologies, Inc. shares rose 39.4% from $4.77 at the close on March 15 to $6.65 at the close on March 16.
As there is another positive event that could potentially trigger another rise in the stock price in the near future, shareholders may wish to hold interests in PCT stocks in their portfolios.
Let’s see what’s in the Q4 2022 update that sent PCT stock price skyrocketing
PureCycle’s flagship purification facility in Ironton, Ohio should now be close to final installation of the remaining processes, which Dustin Olson, the company’s CEO, estimates will be complete in a matter of weeks.
PureCycle engineers anticipate that mechanical delivery of the cleaning system will be completed no later than the first half of April 2023.
PureCycle plans to ramp up production of high purity recycled resins in pellets by the end of April, meaning that producing salable pellets is no longer just a project. The start of this phase should give the stock price another strong move higher after its probable announcement.
Secured by license, PureCycle Technologies, Inc. is authorized to convert waste polypropylene plastic into recycled resins that are characterized by a high degree of purity.
Specifically, the recycling process is the technology that PureCycle can implement to remove specific plastic contaminants (such as color, odor and others) from the waste until the waste is transformed into a new pure resin.
Polypropylene is an industrial good with specific properties such as tear strength combined with good chemical, heat and resistance. It is a very suitable input for the production of a wide range of applications in different industries.
The healthcare and food packaging industry requires polypropylene for personal protective equipment and other disposable medical devices or to ensure food safety through ad hoc packaging solutions. The industrial product is also widely used in the automotive sector by manufacturers of electric and hybrid vehicles.
Although PureCycle could be a smaller player in a universe where big players like LyondellBasell Industries NV (LYB) are trying to dominate the competition, the expected strong growth in the industrial use of this asset over the next few years will lead to market opportunities that PureCycle will likewise could provide address.
While the Asia-Pacific region dominates the polypropylene (PP) market globally, focusing primarily on demand from the packaging and automotive industries, the North American market is instead thriving due to rapidly growing demand for polypropylene from the food and beverage industries.
But that is not all. Let’s stay on the topic of the profitable North American markets. PureCycle Technologies announced a partnership agreement with Formerra yesterday, March 16th.
Who is Formera? As a leading distributor of engineered materials, Formerra will reach new end markets in North America as a key supplier of PureCycle’s high purity recycled polypropylene resin.
PureCycle continues to make significant strides in its growth strategy
In addition, PureCycle continued to make significant strides in its growth strategy. The company announced its first polypropylene recycling plant in the Belgian port of Antwerp-Bruges while developing a joint venture agreement with Mitsui & Co., Ltd. (OTCPK:MITSF) and plans with SK Geo Centric Co., Ltd.
PureCycle’s first European polypropylene recycling plant will have an initial nominal annual capacity of 130 million pounds with the potential to be expanded to a nominal capacity of 520 million pounds. Construction activities in Belgium are scheduled to start in the first half of 2024, while ramp-up of the European polypropylene plant is planned for the first half of 2026.
Mitsui & Co.,Ltd. is a global trading and investment company based in Tokyo, while SK Geo Centric Co., Ltd. is a South Korean manufacturer and distributor of petrochemicals.
PureCycle is working with Mitsui to develop and operate a polypropylene recycling facility in Japan and with SK Geo Centric to build a recycling facility in Pin on Ulsan, South Korea.
The South Korean plant is expected to produce 130 million pounds of polypropylene annually, with production expected to ramp up before the end of 2025.
With an expected capacity of 59,000 tons (or about 130 million pounds), the Japanese plant is scheduled to come on stream in 2026/2027.
PureCycle Technologies continues to advance the project to realize its planned multi-line purification facility in Augusta, Georgia, where the first two production lines are expected to be operational in less than 1.5 years.
The progress made in Ohio should give investors great confidence in the success of the growth strategy being implemented in Georgia. The Company will be better equipped to provide the financial backing that the Phase 1 Augusta project requires to move into a production phase.
In terms of funding for the Augusta Project, the Company can benefit from an extended funding period through June 30, 2023 based on an agreement with the Augusta Economic Development Authority.
At the end of 2022, PureCycle’s balance sheet reported total liquidity of $326.1 million, of which 50% was cash and short-term investments and 50% was restricted cash.
PureCycle’s debt, including accrued interest, totaled $249.6 million. In addition, the Company has secured a $150 million line of credit to be drawn for general working capital purposes.
The company appears to have more than enough financial resources to fund an additional $39 million to $45 million in spending expected in the first quarter of 2023 before the Ironton facility finally begins production of high-purity recycled resin pellets becomes.
PureCycle Technologies shares are trading at $6.51 a share at the time of writing, giving it a market cap of $1.09 billion.
Despite the recent surge in very positive news about Ironton, the stock price is still trading well below the 200-, 100- and also 50-day simple moving averages and below the median of $7.695 of the 52-week range of $4.44 to Traded $10.95.
As such, shares appear to have plenty of room to continue higher, and another potential rally could follow when the company announces commercial production of ultra-pure recycled resin pellets from its Ironton, Ohio, facility.
Someone would argue that the anticipated event, with its upside potential, is already priced into the stock price, reducing the scope for an impressive gain. That’s possible, but unlikely as the stock price is recovering from the bottom formed after falling to a 52-week low last week.
The 14-day relative strength index of 53.06, which suggests stocks are not yet overbought despite the strong rally of the last 2 days, also shows that the stock price has more than enough room to bounce from the current Level from continue to rise if he wants to.
As such, investors may wish to continue owning shares of PureCycle Technologies.
It may not make sense to take profits now as the company’s operations appear poised to deliver another piece of positive news, most notably the start of salable production of ultra-pure recycled resin pellets at Ironton.
There remains a risk that PureCycle may again have to delay the start-up of its Ironton facility, as it has over the past four months, as the Company has faced multiple challenges that have resulted in delays beyond its direct control .
However, that risk appears to have been greatly reduced, judging by the words of PureCycle’s CEO, who reassured shareholders that the company should finally be on its way to commercial pellet production in Ohio.
Perhaps the most feared headwind could come from continued rate hikes to further combat high inflation, as ever-rising cash costs aren’t a good thing for a company that needs to raise funds to support its growth.
But even this headwind has its detractors, which consist of the following factors. A financial position for PureCycle Technologies, Inc., which appears to be able to rely on its existing forces to achieve the Ohio goal. The positive impact on US-listed stocks, including PureCycle, of continued rumors of a possible suspension or easing of interest rate hike policies to prevent the collapse of Silicon Valley Bank and Signature Bank (SBNY) fueled a domino effect in the financial system.
PureCycle Technologies, Inc. made a big jump in the stock market after its corporate update and financial results for the fourth quarter of 2022, released two days ago, reported that its Ohio facility for converting waste plastics into high-purity recycled resins into pellets overcame its delay in last minute.
PureCycle Technologies, Inc. shares have rebounded but still have significant upside potential as more positive news could emerge for this stock in the near future.
Investors should consider holding PureCycle Technologies, Inc. stocks.
Editor’s note: This article covers one or more securities that are not traded on a major US exchange. Please be aware of the risks associated with these stocks.