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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

Equity Research Firm

Thematic (Sector/Industry)

Multiple Countries / Thematic (Sector/Industry)

SUMMARY
Upcoming Events
EVmo, Inc. (YAYO)

EVMO, Inc. CFO Ryan Saathoff to discuss company’s financial approach to tripling its fleet of cars in 2022. Call on June 9 at 11:00 am EDT.

Last Week’s Events
Gevo, Inc. (GEVO)

Gevo CEO Dr. Pat Gruber discussed milestones expected in 2022 and gave a year-to-date progress report.

Last Week’s Research
Crown Electrokinetics. Corp. (CRKN)

Closing In on Debt Financing with Execution of Non-Binding Term Sheet to Fund Two Production Lines

Previous Research
EVmo, Inc. (YAYO)

Company at an Inflection Point as the Pace of New Cars Accelerates; 2022 Guidance Reaffirmed
Fireside Chat Highlights: Building Customer Demand Ahead of Fleet Growth

Crown Electrokinetics Corp. (CRKN)

1Q22 Results: Marching Ahead to Commercialization with Initial Production Expected This Summer

SES AI Corp. (SES)

1Q22 Results: Strong Cash Balance of $426 Million to Support Key Future Milestones and Drive Commercialization of Li-Metal Technology
Driving Ahead with Commercial Scale Proprietary Li-Metal Battery Solutions For Electric Vehicles

Electrovaya, Inc. (EFL)

2Q22 Results: Revenue Surged 46.6% Y/Y; Gross Margin Declined By 6.4% Y/Y; Key Recent Developments
Dr. Sankar Das Gupta: Electrovaya’s Disruptive Battery Technology, Strong Growth Prospects, and IP

INDEX STATISTICS



ABOUT THE WTR INDEX
The WTR Sustainable Investing Index is built on 150 companies in four primary segments with multiple sub-sectors: (1) Energy Technology (including Power Generation, Hydrogen &amp; Fuel Cell, Energy Storage, and Lithium Supply Chain); (2) Modern Mobility (Advanced Motive, EV Charging, Smart Driving); (3) Industrial ClimateTech; and (4) Smart Buildings. The index monitors share price performance, valuation metrics, and consensus estimates. Our weekly reports also cover industry activity and news flow.
SUMMARY

WTR Sustainable Index: During the week ended June 3, 2022, the WTR Sustainable Index underperformed the broader market, falling 5.2% W/W versus the S&amp;P 500 Index (down 1.2%), the Russell 2000 index (down 0.3%), and the Nasdaq Composite Index (down 1.0%). Industrial ClimateTech saw positive returns of 2.9% last week, while Energy Technology, Modern Mobility, and Smart Buildings fell 5.4%, 6.0%, and 2.0%, respectively.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 24.6x versus 17.7x for the S&amp;P 500.
Consensus estimates changes: During the week ended June 3, 2022, there were&nbsp;increases&nbsp;in 2022 revenue estimates for two companies in Energy Technology and one in Modern Mobility. There were&nbsp;decreases&nbsp;in 2022 revenue estimates for one company in Energy Technology and four in Modern Mobility. Five companies (three in Modern Mobility and one each in Industrial ClimateTech and Smart Buildings) saw&nbsp;increases&nbsp;in 2022 EPS estimates, while five companies (two in Energy Technology and three in Modern Mobility) saw decreases in 2022 EPS estimates.

SHARE PRICE PERFORMANCE SUMMARY
Share Price Performance
EFOI shares were up 88% following news of its $3.5 million private placement. VIHD shares were down 43% following its acquisition of a renewable fuels development project.




Consensus Estimates
Figures 7-8 show W/W changes in FY22 revenue and EPS estimates for selected companies in the WTR Sustainable Index. For the week ended June 3, 2022, there were five increases and eight decreases in FY22 revenue estimates, and five increases and five decreases in FY22 EPS estimates.
Figures 9-10 show the number of companies with W/W changes in consensus revenue and EPS estimates by sub-sector for FY22E.


















KEY INDUSTRY AND COMPANY NEWS OF THE WEEK
Energy Technology
Engie, Google Cloud to Develop AI Solution for Wind Energy
https://www.power-technology.com/news/engie-google-cloud/
French utility company Engie has partnered with tech giant Google for developing an artificial intelligence (AI)-based wind energy solution. Under this new partnership, Engie and Google Cloud’s AI Services and Industry Solutions (AIIS) will work together to develop a solution that can predict the price and quantity of wind power to be sold in the market. Google Cloud Global Energy Solutions director Larry Cochrane said: “At Google Cloud, we believe that more accurate data and predictions of wind power production will be valuable to electricity grids, creating benefits for consumers and making wind more competitive with fossil fuels. “We are delighted to work with ENGIE on this project, which can accelerate Europe’s clean energy transition, while laying the groundwork for wind farms around the world to benefit from improved forecasting via Artificial Intelligence.”
The Energy in Nuclear Waste Could Power the US for 100 Years, but the Technology Was Never Commercialized
https://www.cnbc.com/2022/06/02/nuclear-waste-us-could-power-the-us-for-100-years.html There is enough energy in the nuclear waste in the United States to power the entire country for 100 years, and doing so could help solve the thorny and politically fraught problem of managing spent nuclear waste. That’s according to Jess C. Gehin, an associate laboratory director at Idaho National Laboratory, one of the government’s premier energy research labs. The technology necessary to turn nuclear waste into energy is known as a nuclear fast reactor, and has existed for decades. It was proven out by a United States government research lab pilot plant that operated from the 1960s through the 1990s. For political and economic reasons, the technology has never been developed at commercial scale. Today, there’s an increased urgency to address climate change by decarbonizing out energy grids, and nuclear power has become part of the clean energy zeitgeist. As a result, nuclear fast reactors are once again getting a serious look.
Modern Mobility
Siemens Mobility Signs Contract for 2,000km High-Speed Rail System in Egypt
https://www.globalrailwayreview.com/news/134706/siemens-mobility-sign-contract-for-2000km-high-speed-rail-system-in-egypt/
Siemens Mobility and its consortium partners Orascom Construction and The Arab Contractors have signed a contract with the Egyptian National Authority for Tunnels (NAT), a governmental authority under the jurisdiction of the Ministry of Transport of Egypt, to create the sixth largest high-speed rail system in the world. The Siemens Mobility share of the combined contract is €8.1 billion and includes the initial contract of €2.7 billion for the first line signed September 1, 2021. The contract was signed by Lieutenant General Kamel Al Wazir, Minister of Transport Egypt, and Dr. Roland Busch, President and CEO of Siemens AG, as well as Osama Bishai, CEO of Orascom Construction and Sayed Farouk, President and CEO Arab Contractors.
Ford CEO Expects to See Industry Consolidation as the Costs of Transition to Electric Vehicles Rise
https://www.cnbc.com/2022/06/01/ford-ceo-expects-ev-transition-to-force-industry-consolidation.html
Ford Motor CEO Jim Farley expects the auto industry’s ongoing transition to electric vehicles to force major consolidation among automakers and suppliers in the years ahead. Farley said the massive amounts of capital needed to invest in the technologies will force smaller companies to be acquired and put pressure on new electric-vehicle start-ups that are already running into trouble as funding dries up. He said there will be more acquisitions, compared with the partnerships or joint ventures that are more common today. Legacy automakers and suppliers, he said, “absolutely will get consolidated.” “There will be some big winners, some people who transition, some who won’t. Many of the small players cannot afford to make this transition,” Farley said Wednesday during the Bernstein 38th annual Strategic Decisions Conference.
Smart Buildings
IoT Tech Helps Local Governments Address Sustainability
https://www.techtarget.com/iotagenda/post/IoT-tech-helps-local-governments-address-sustainability
The future of smart communities is green. Around the world, local government leaders are reimagining how they can deliver energy-efficient and sustainable infrastructure in their environments. The longer these challenges go unaddressed by leaders, the less confident communities are in their local governments' ability to support their needs. Municipal leaders must focus on doing more than just getting their local economies back on their feet; they must foster robust economic revitalizations to regain community trust. Long-term success will result from municipal leaders who decide to build resilient infrastructure that prioritizes resident and planet health; IoT and smart city infrastructure is one way to advance and build out such initiatives.
Smart Buildings Pose a Challenge for Landlords and Tenants
https://www.dentons.com/en/insights/articles/2022/june/3/smart-buildings-pose-a-challenge-for-landlords-and-tenants
During a recent multi-day commercial leasing institute, a room full of real estate attorneys spent several hours discussing the various issues that are now arising with so-called “smart buildings.” These various technologies are generally considered part of the Internet of Things (IoT). IoT devices are facing scrutiny. The primary concern with IoT is security. A vulnerability in a company’s network may expose the broader network to an attack. What good is securing all company laptops if a Wi-Fi-enabled coffee maker lets attackers onto the network? Additionally, the use of the data these technologies collect is a concern. General, anonymous data is not typically regulated; however, anything identifiable could be. As one might expect, these technologies may be more problematic for certain tenants of buildings more than others. For example, if an owner/landlord has a government agency tenant, that agency may have serious concerns with facial recognition/detection technology. Similarly, a health services center may have hesitations of their own with the use of drones for delivery and whether patient data may be compromised. Others may just have general concerns of privacy with robots, drones, facial recognition, microbe sensing, diagnostic toilets, proximity services, augmented reality facility maintenance and others that capture data about an individual – be it health data, personal identification data, biometric data or some other data set.
Industrial ClimateTech
Practical Scalable Climate Tech Solutions Are the Need of the Hour
https://www.prweb.com/releases/practical_scalable_climate_tech_solutions_are_the_need_of_the_hour_raj_chowdhury/prweb18706458.htm
Concerns for climate change and its associated environmental impact are rising each passing year, leading to widespread growth in the global green tech sector. HashCash CEO Raj Chowdhury lauds these climate-conscious efforts and believes the time is appropriate for these technologies to deliver viable solutions. The growing agitation is justified considering the fact that world temperatures have been on average 1℃ above the pre-industrial period (1850 to 1900) for the 8th consecutive year in 2022, as per the World Meteorological Organization (WMO). Additional reports reflect that worldwide carbon emissions scaled a new high at 36.44 billion tonnes in 2019. The following year’s 5.8% decrease was mainly due to the global COVID pandemic.
WTR SUSTAINABLE INDEX CONSTITUENTS
Figure 23: Energy Technology Comp Table


Source: Thomson Reuters
Figure 24: Modern Mobility Comp Table


Source: Thomson Reuters
Figure 25: Industrial ClimateTech Comp Table

Source: Thomson Reuters
Figure 26: Industrial Cleantech Comp Table

Source: Thomson Reuters
DISCLOSURES

Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.  WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.  Shawn Severson and Graham Mattison who are the writers of this report, covers the BioEconomy, Emerging Growth &amp; Special Situations, ClimateTech &amp; Sustainable Investing, and Industrial Technology sectors for WTR. Mr. Severson and Mr. Mattison including members of their household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.  Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.  In certain instances, including this report, WTR will write research covering non-clients. Readers should assume that WTR may seek to turn these non-paying companies into paying clients. Likewise, WTR may seek to transform these non-clients into paying clients of it or of its affiliate, which provides services such as presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services of WTR or an affiliate might offer to clients.  The manner of WTR’s potential research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly written compliance guidelines.  The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors or agents shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.  All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.

Weekly Sustainable Investing Surveyor: Week Ended June 3, 2022