Synthesis Energy Systems (NASDAQ:SYMX)

CAPS Rating: 1 out of 5

Results 1 - 15 of 15

Recs

0
Member Avatar pchop12316 (64.71) Submitted: 5/2/2016 3:18:53 PM : Underperform Start Price: $1.19 SYMX Score: +14.53

likely to lose a lot more

Recs

0
Member Avatar SmartAce (99.89) Submitted: 4/11/2016 3:44:40 PM : Underperform Start Price: $1.25 SYMX Score: +20.18

Tried to take a photograph of some fog.
Mist

Recs

0
Member Avatar john603 (62.89) Submitted: 4/11/2016 2:24:04 PM : Underperform Start Price: $1.23 SYMX Score: +18.68

JED71 A China related company turning garbage into gas.

Recs

3
Member Avatar jed71 (99.86) Submitted: 4/7/2016 11:18:29 AM : Underperform Start Price: $1.26 SYMX Score: +20.80

There are few public sectors in the market I hate worse than Biomass / Feeder Mass Energy companies. Not that I dislike the technology nor do I want to destroy the planet; it’s more because the sector is filled with companies with dubious reputations and EXTREMELY questionable business practices. In addition, I personally feel the technology has a long ways to go from an efficiency standpoint to compete with Nuclear and Natural Gas as a good, alternate energy source from oil and coal. One might disagree with the premise of what is best to use as an appropriate energy source for the environment, but I hardly believe one could disagree that the biomass energy sector is filled with companies practicing, shall we say, we questionable businesses.

With that introduction, here is a brief snippet of what SYMX does:

“The Company’s business is to create value by supplying its technology, equipment and services into global projects where lower cost low quality coals, coal wastes, municipal wastes, agricultural biomass, and other biomass feedstocks can be profitably converted through its proprietary gasification technology into clean synthesis gas, or syngas (a mixture of primarily hydrogen, carbon monoxide, and methane), which is then used to produce a variety of high value energy and chemical products. The Company’s initial operating projects to date convert high ash coal and coal wastes to chemical grade methanol, and the Company is pursuing a variety of additional global projects under development by customers who may use its technology platform to convert low quality coals such as lignite, coal wastes, municipal wastes and agricultural waste biomass to high value products such as electric power, transportation fuels, substitute natural gas fuel for direct reduction iron steel making and other products. The Company’s technology is originally based on the U-GAS® process developed by the Gas Technology Institute and the Company has augmented and differentiated the technology through design, detailed engineering, constructing, starting up and operating two commercial plants in China. The Company’s headquarters is located in Houston, Texas.”

So what’s wrong with this? Absolutely nothing! I wish them luck, and hope they figure out a way to make this type of energy extraction super-efficient! But I do think the company provides products that are quite expensive in a market where both oil and nat gas are currently extremely inexpensive. To me, this company represents “window dressing”. If a firm wants to look “greener” or needed some positive PR, they might come to this firm for a small investment in their reputation.

I also spent some time looking through their financials, and wow. Revenue is declining, but it’s so low in any given year, it’s hard to take this company seriously as a NASDAQ traded stock. In the latest quarter, revenue was ~$800K in contrast with revenue in the previous quarter of $3.4MM!!! In addition, Op Cash Flows have been negative every single year for the last 5 years!! There’s lots more in the financials to support a red thumb but I’ll let you pick those pieces apart.

The other two items I really dislike about the firm are its relationship with Chinese firms and the typical joint ventures that come with a firm with Chinese relationships. Here is a snippet from the recent 10-Q:

“On July 24, 2013, the ZZ Joint Venture entered into a cooperation agreement (the “ZZ Cooperation Agreement”) with Xuecheng Energy and its parent company, Shandong Xuejiao Chemical Co., Ltd. (collectively referred to as “Xuejiao”), which serves to supersede the existing syngas purchase and sale agreement among the parties dated October 22, 2006 and supplemented previously in 2008. The ZZ Cooperation Agreement, which became effective on October 31, 2013, represents the basis for an integrated syngas to methanol operation and resolution of the nonpayment of the contractual capacity fees by Xuejiao. Under the terms of the ZZ Cooperation Agreement, Xuejiao will
(i) provide the ZZ Joint Venture with use of their methanol plant for ten years at no cost to the ZZ Joint Venture,
(ii) provide a bank loan guarantee of approximately $3.3 million for a majority of the financing necessary for the ZZ Joint Venture for the retrofit and related costs of the ZZ Joint Venture plant,
(iii) waive certain advances previously made to the ZZ Joint Venture and
(iv) Supply discounted coke oven gas produced by its existing coke ovens to be used in combination with synthesis gas to produce refined methanol from the new ZZ Joint Venture integrated syngas methanol operation. The new integrated operation will be managed by the ZZ Joint Venture. The Company assumed operational control of the integrated methanol production facility in October 2013 under a restructured commercial arrangement.”

At one point, the firm owned more than 97% of this joint venture yet it looks like that percentage is being reduced. The piece I hate about companies like this is it is so difficult to unwind and fully understand these relationships. The more I looked at their joint ventures, the more I think these agreements do not make sense for shareholders. There’s quite bit of additional information in the 10-Q but paint me VERY skeptical that this company will be around in 2 years.

Recs

0
Member Avatar pchop123 (80.99) Submitted: 8/1/2014 11:58:35 AM : Underperform Start Price: $1.30 SYMX Score: +29.80

good short

Recs

1
Member Avatar griffinfinity (92.51) Submitted: 1/4/2012 1:39:56 AM : Outperform Start Price: $1.55 SYMX Score: -96.55

This stock is highly speculative. However, China and India still need energy last I heard, and this company is already involved in both countries. They hold the rights to the U-Gas process that makes sub-par coal usable to convert into desirable fuel. I think it is going to do well. Take off? Let's be patient and leave gimmick gains to short-lived comets...

Recs

1
Member Avatar Lcrazylegs84 (< 20) Submitted: 10/1/2011 12:45:49 AM : Outperform Start Price: $1.75 SYMX Score: -124.99

great company

Recs

1
Member Avatar JPAKolypse86 (< 20) Submitted: 7/13/2011 10:50:30 AM : Outperform Start Price: $2.63 SYMX Score: -116.01

Bad news first. Profit and Operating margins -150%. No return on assets or equity. And $-14million cash flow (more than 10% of the company's total value).

Good news is their sales growth. Sales have grown 28 times over just 2 years. Currently they have about $9 million in sales, not bad for a company that is barely 3 years old.

Their debt concerns? Long term debt is %60 of what it was 3 years ago. Total liabilities follow the same trend. They are U.S based and they operate in china. They straddle my two favorite industries, energy and chemicals. And they are considered a "green" stock, which should help the company generate a lot of buzz.

Bottom line is that these guys have huge upside potential. And its not a too good to be true story either. They have acted responsibly by pushing sales and using the revenue to pay down debt. If YOY sales growth is just half of what it was last year, then Synthesis could be in positive territory in just 2 years. Buying a few hundred shares at market now should put your cost basis in around $2.70 (adjusted for $40 broker commission).

Recs

0
Member Avatar bennyrobs (< 20) Submitted: 5/14/2011 11:23:04 AM : Outperform Start Price: $2.71 SYMX Score: -116.50

This stock is an alternative energy stock. Dealing with Clean coal and Biomass gasification technology. They have a unique market advantage because of the U-Gas technology which they invented. They are aggressively picking up contracts in developing nations through out the world.

Recs

0
Member Avatar EclecticRecluse (80.91) Submitted: 5/3/2011 10:43:14 AM : Underperform Start Price: $3.21 SYMX Score: +119.81

Low Professional Price Target

Recs

0
Member Avatar SharpVision (< 20) Submitted: 4/30/2011 2:21:58 AM : Outperform Start Price: $4.00 SYMX Score: -124.47

The need for this technology is undoubtfully going to create growth potential of SES.

Recs

0
Member Avatar ChinaRTO (99.91) Submitted: 4/14/2011 3:38:32 AM : Underperform Start Price: $3.26 SYMX Score: +126.08

This is a tracking portfolio of all CAPS-ratable tickers in the Chinese RTO/SPAC space (i.e., companies that listed without filing an IPO).

Synthesis Energy Systems, Inc. went public via a reverse merger in 2005. The company is based in the United States, with primary operations in China.

Recs

0
Member Avatar ladarius901 (31.57) Submitted: 4/8/2011 1:23:30 PM : Underperform Start Price: $3.12 SYMX Score: +121.72

do bad

Recs

0
Member Avatar unstoppablepeon (22.82) Submitted: 10/27/2008 12:34:37 AM : Underperform Start Price: $1.71 SYMX Score: +184.53

worst 30days caps

Recs

3
Member Avatar deltastream (< 20) Submitted: 9/23/2008 4:35:44 PM : Outperform Start Price: $5.85 SYMX Score: -159.32

Deutsche Bank research report pegs a $47 share price in 3 years.

Results 1 - 15 of 15

Featured Broker Partners