LanzaTech Global Inc. (LNZAW)

LanzaTech Global Inc. Stock Overview

Company Profile

History and Background:

• Founded in 2005 in New Zealand
• Pioneered technology for converting waste gases and residues into fuels and chemicals.
• Launched commercial operations in China in 2018 and announced plans for a US facility in Georgia.
• Went public through a SPAC merger in June 2023 under the stock symbol LZAC.

Business Areas:

LanzaTech focuses on three main areas:

1. Renewable fuels: Converting syngas from various feedstocks (biomass, industrial emissions etc.) into low-carbon Ethanol and sustainable Aviation Fuel (SAF).
2. Renewable chemicals: Utilizing waste-based syngas to produce chemicals like polyethylene (PE).
3. Carbon Capture: Utilizing gas fermentation to capture and permanently store atmospheric carbon. Leadership Team:

• CEO - Jennifer Holmgren
• President & COO - Jennifer Holmgren (dual role)
• CFO - Michael Petrides
• VP of Sustainability and Corporate Affairs - Jim Lane
• Head of Investor Relations & Strategy - Sean Harrison Corporate Structure:

• Headquarters in Skokie, USA
• Research and Technology Centre in Skokie
• Innovation Hub and Commercial Centre in Beijing
• Commercial operations in China and Georgia (under development)

Products and Market Share

Top Products:

• Low Carbon Ethanol (LCE): Can be blended directly in the gasoline pool and reduces emissions compared to fossil-derived gasoline.
• **Sustainable Aviation Fuel (SAF): ** Can reduce lifecycle greenhouse gas emissions by up to 92%.
• Renewable Polyethylene (PE) A high performance biobased polyethylene made from recycled carbon.

Global Market Share: LanzaTech's renewable products are in their initial stage of commercialization. While precise market share information is not yet available, they are positioned as early movers in a market with growing global demand for sustainable alternatives. Competition and Market Reception:

• LCE: Competes with conventional bioethanol. Advantages include lower carbon intensity and no land requirements for feedstock cultivation.
• SAF: Competes directly with fossil-derived jet fuel. Gains traction with airlines committed to decarbonization goals.
• Renewable PE: Competes with conventional polyethylene. Offers significant sustainability advantages, attracting interest from brands and consumers.

Market Size

The total addressable market for LanzaTech's products is significant and expected to grow:

• Global Sustainable Aviation Fuel Market - Estimated value of USD 350 billion by 2030, with a projected annual growth of over 22%.
• Global bioplastics market – Forecasted to reach over $35.93 billion by 2025 with a CAGR (2030) of 16% during 2019-2025
• Global biofuels market size – Projected to surpass 32 billion gallons of gasoline- and biodiesel equivalents by 2025 with CAGR 8%.

Financial performance

• Revenue Increased from 0 to 5.4 million between 3Q22- 3Q23

• ** Net Income**: Net loss decreased from $32.4 to $28.5 million between 1Q22 and 1Q23.
• Profit Margin: Negative, improving slightly with increasing revenue
• Earnings per Share(EPS) - Negative, with improvement from $1.12 loss in 1Q22 to a $0.97 loss in 1Q23.. Cash Flow and Balance: Operating cash used in 3Q2023 was $12.2m compared to $9.04 m in 3Q 2023. Cash and cash equivalents as of the last report was around $ 350 million.

Shareholder Returns

LanzaTech has not yet paid any cash dividends as a newly publicly-traded company and its focus remains on future growth. Total return to shareholder has been negative since IPO in a declining market, however stock has seen recent rebound from lows

Growth trajectory

LanzaTech is a growing early stage commercial company. Key drivers and recent milestones for future growth are:

• Expanding existing China facility and building US commercial facility

• Developing partnerships to scale technology

• Entering into strategic collaborations e.g.

  • MoU with Chevron and Microsoft on SAF

• Partnership with Zara for biobased textiles

Industry and Competitive Landscape

Industry Overview: The carbon capture, waste management & sustainable fuels market are burgeoning, driven by increasing demand for sustainability, climate change concerns, and stringent government regulations.

Key Competitors:

Renewable fuels and SAF

• Gevo (GEVO): Leading producer of renewable jet fuel and other bio-based chemicals

• Neste (NESTE:HE): A major player in renewable fuels with established operations

  Sustainable Chemicals:

• NatureWorks (NGH): Produces a leading brand of polylactic Acid (PLA) bioplastic.

• Braskem (BAK): Leading bio-polyethylene producer

LanzaTech has a competitive advantage due to its innovative platform technology, which can produce a wider range of products from diverse waste feedstocks and demonstrated environmental benefits of their processes. However, competition is expected to intensify as larger industry players invest in similar technologies.

Potential Risks & opportunities

Key Challenges

• Scaling operations
• Technological advancements by competitors.
• Securing financing for growth plans Key Opportunities:

-Growing global markets for sustainable Aviation fuels, Renewable chemicals and carbon Capture

• Increasing government incentives for sustainability
• Partnering with major players and leveraging partnerships

Recent acquisitions

• In August 2022, LanzaTech acquired the BioCampus in China for USD 390.2 million to expand operations.

AI based rating

Based on current financial status, market potential,
competitive positioning LanzaTech scores an AI based fundamental rating
of 6.7 out of 10. While there is significant long- term
growth potential, execution on development, partnerships
and scaling operations remain key factors in future success

Sources and disclaimers

Disclaimer: This report is for general information and educational purposes.

Sources used to compile this data include company websites, quarterly financial filings, investor reports, news, industry articles.

Investors are urged to consult a financial advisor before making individual investment choices.

Please note:

• All financial numbers provided here are based on the last reported results, which may be superseded at the time of reading
  • Estimates of market share, total addressable market are subject to assumptions and variability

I hope this detailed analysis provides valuable insights on LanzaTech Global Inc. and the factors shaping its potential future prospects.