$ASRE Renewable Energy Ramp Up At the moment, Astra Energy, Inc. (OTC: ASRE) is at a pivotal point in its growth. ASRE is a renewable energy company with international operations that is poised to experience a significant growth spurt. This is mainly due to the company starting to ramp up operations to tackle 2 major projects with a budget exceeding $500 million. Once these projects are completed, the company’s financial health will improve greatly thanks to the revenue stream expected from both projects. In light of this, going long on ASRE stock may be a profitable decision.
ASRE Fundamentals
On its current path, ASRE could end up generating between $180 million – $200 million annually in the next 25 years due to long-term agreements with state-owned enterprises (SOE). One project is for the construction of a 50-Megawatt electric company in Zanzibar with a budget of $170 million, and the other is a Tanzanian 350-Megawatt power plant project with a budget of $380 million.
The way these projects work is simple. First, ASRE purchases or leases land on which it builds its facilities. After that, the company acquires a foul source which varies according to the project. For Tanzania, the foul source is natural gas, and for Zanzibar, it is waste from landfills. Once the land and the foul source are available, the company would then convert the foul source into energy and sell it to the SOEs via long-term purchasing agreements.
It is important to note what makes such an endeavor possible is ASRE’s intellectual property portfolio which is critical since it provides crucial information related to the execution of the projects. Both countries involved in this project are seeking to revamp their electrical infrastructure which is why they are likely more interested in the company’s intellectual property first and foremost. Given the fact that both projects are backed by government entities that stand to benefit from the construction of the project’s underlying facilities, it is fair to assume that additional government funding is not out of the question.
If the company remains on its current trajectory, it should finish construction of the Zanzibar plant in 2025 and the Tanzanian plant in 2027. Given this information, going long on ASRE stock in anticipation of substantial growth in the coming years could prove to be a profitable investment.
ASRE Financials
According to it ASRE’s Q3 2023 report, the company’s assets increased from $10 million to $24 million due to a $4.8 million increase in right operating leases, which gives the company the right to use additional assets, as well as increasing investment in subsidiaries, and pre-paid stock for the acquisition of Regreen Technologies, Inc. On the other hand, the company’s liabilities substantially increased from $447 thousand to $5.5 million due to operating lease liabilities in excess of $4.6 million. This fluctuation of operating lease liabilities occurred because the company leased 207 acres in Zanzibar for 33 years which is part of its deal with Zanzibar.
In terms of revenue, ASRE did not generate any. As for expenses, the company witnessed an increase from $210 thousand to $228 thousand mostly due to business development. Naturally, the company’s net loss increased from $210 thousand to $221 thousand.
Technical Analysis
ASRE stock is in a neutral trend with the stock trading in a sideways channel between $0.35 and $0.43. Looking at the indicators, the stock is below the 50 and 21 MAs which is a bearish sign, but above the 200 MA which is a bullish sign. Meanwhile, the RSI is neutral at 44 and the MACD is curling bullishly.
As for the fundamentals, ASRE stock could be poised for substantial growth due to the fact that the company just struck two government-funded and backed deals to manufacture electrical plants. At its current trajectory, ASRE could net $200 million annually in revenue over the course of the next 25 years. With the stock trading at support, the current PPS could be a good entry as the stock may run soon given the bullish sentiment surrounding it.
ASRE Forecast
With projects that have a combined budget of over $500 million in Zanzibar and Tanzania, ASRE stock may be poised to significantly increase in value in the long term. Given that both projects would provide the company with nearly $200 million annually for the next 25 years, the company’s prospects are extremely bright – especially since these projects are with the government. With the stock trading at support after cooling down from its initial run, ASRE may see a second run soon as more investors are familiar with the company’s potential.
