RNE 0.00% 8.0¢ renu energy limited

the more holes the more revenue

  1. 3,567 Posts.
    Just doing some reading on this stock. Apparently once the pilot plant is up and running (about a 20Mw plant) it can be scaled up by simply drilling more and more holes. I wonder at what point the economics stop working i.e. if they get a 300Mw plant going whats to stop them making a 1000 or 5000 Mw plant?

    A 5000Mw plant would generate revenues around $3bn (AUD) with a profit margin around 50% before depreciation. These figures are very very rough but it does illustrate the upside potential for this stock. It could value the stock at say a PE of 8 around $235 per share (exluding any further capital raisings etc). So 1000 shares now at a cost of $740 could be worth $235,000??? Are these numbers correct???

    While they would have to spend close to $1bn building the power station and other infrastructure the dividends would come from the cheap operating costs and carbon credits. They suggest operating costs less than 1c per Kwh while they can sell it for around 7c, what a mark up huh!!
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