Greenlane Renewables Inc T.GRN

Alternate Symbol(s): GRNWF

Energy Technology

Greenlane Renewables Inc. is a Canada-based company, which provides biogas upgrading systems. Its systems produce clean, renewable natural gas from organic-waste sources including landfills, wastewater treatment plants, dairy farms, and food waste, suitable for either injection into the natural gas grid or for direct use as commercial vehicle fuel. The biogas upgrading systems, marketed and sold by the Company under the Greenlane Renewables brand, remove impurities and separate carbon dioxide from bio methane in the raw biogas created from the anaerobic decomposition of organic waste at landfills, wastewater treatment plants, farms, food waste streams, and other feedstock sources. It is deploying the three main upgrading technologies: water wash, pressure swing adsorption, and membrane separation, plus biogas desulfurization technology. It has delivered over 140 biogas upgrading systems into 19 countries, including some of the renewable natural gas production facilities in the world.

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Greenlane Renewables Inc > Something Else To Consider

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Comment by BCdudeon Nov 29, 2020 4:51pm

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RE:RE:Something Else To Consider

Funny, somebody asked me about GRN on the UGE board yesterday. I decided to do a quick comparison, which resulted in this.

I first bought into UGE at $0.25 and GRN at $0.34 and am not planning to sell a single share of either company. However, my view is that UGE is a better buy at current levels than GRN, though I expect both to do well long term.

I always like to run some numbers to give me an idea of value proposition. Here are mine:

UGE is currently valued at ~$54 million market cap and only has 26.6 million shares outstanding. Fully diluted they only have 29.3 million = $60 million at current price point. This is against a $143 million CDN backlog, with NPV of ~$350 million over 25 years. Annually, within two years, I expect UGE to have at least $14 million of high-margin revenue PLUS an additional projects they sign, which will add additional value as they are brought into the pipeline of projects. I'm still calling for a share price of $5.00/share in 2-3 years, possibly sooner.

GRN is currently valued at ~$109 million market cap with 98.2 million shares outstanding. Fully diluted they have 143 million = $159 million at current price point. Compare this to a $57 million CDN backlog (less than half of UGE) with no NPV add-ons since none of the business they currently have has recurring revenue. SVEN Capital should change that at some point, giving them some recurring revenue on new projects funded through that partnership.

Revenue-wise GRN has the edge right now, with Haywood estimating $25.7 million in 2020, and a whopping increase to $46.6 million in 2021. Comparitively speaking, UGE will likely only have $2 million in revenues in 2020 as they continue to change business models. But you should see massive growth in UGE's revenue in 2021 and 2022 as it brings its backlog online, and continues adding new projects.

I like the visibility of UGE's backlog revenue as it comes online, despite lower revenue right now. I also think it's fully diluted valuation of $60 million vs. GRN's valuation at $159 million means that it has more room to run. However, you could make the reverse argument based on revenue projections for the short term.

Personally, I'd own both UGE and GRN long term and buy more if we get a downdraft in the markets that takes both of them lower.