market cap comparison esi heavily undervalued

For benchmarking purposes some of you may be aware of an excellent comparable to use for ESI moving forward.

White Energy Company Limited (WEC) produces briquettes from brown coal and will compete in the same global market as ESI. They do hold a few mining licenses but primarily their business is in improving the feedstock quality of brown coal through patented technology.

Although WEC is yet to generate proper cashflow, shareholders of WEC have enjoyed an excellent return over the last 18 months as the company began aggressively partnering with foreign companies and receiving support from BHP by way of $35m convertible note.

The technology is nothing special with ESI easily matching however it does come heavily marketed as “CSIRO developed technology�.

WEC is a very professional outfit with good stewardship and an excellent ability to establish partnerships/JVs, and with BHP onboard WEC’s credentials have increased tenfold in the mindset of the investor.

FUNDAMENTALLY THOUGH not a lot is different between the two companies in terms of a product and potential. WEC is probably about 12 months ahead in terms of partnering and establishing JVs and has a better reputation with investor confidence a lot higher in the management’s ability to deliver. (ESI’s negativity IMO is largely due to the Geostar deal collapse).

Revenue wise, both companies are yet to turnover any serious cash.

ESI
261,287,203 Fully paid shares
Market Cap of $24 million

WEC
117,831,896 Fully paid shares
Market Cap of $294 million

The ESI management reshuffle was a necessity and should be looked upon in a positive light and we know commercial deals are not far off. Secondly you must also consider the Matmor process which will provide a huge second wind for ESI and will probably be in the long-term the real money earner as there’s no real environmental issues associated with this process.

Looking at the above market cap comparisons I hope this provides some perspective on just how UNDERVALUED ESI currently is.

Cheers