Edison Investment Research Limited: MeaTech (MITC) - Initiation: A Meat Revolution

Rhea-AI Summary

MeaTech 3D is pioneering three-dimensional printing technology for cultured meat production, aiming to address the rising demand for protein with premium products like marbled steak. Despite the growing interest in alternative meats, the company anticipates no positive revenues or profits in the near future due to its start-up status and regulatory hurdles. As the first public cultured meat firm, it faces unique challenges with a net cash position of $30.6m at the end of H121 and a cash burn rate of $5.9m per period, suggesting it may sustain operations for about 2.5 years. However, ongoing initiatives could accelerate cash burn.

Positive

• MeaTech is positioned in a growing industry focused on alternative protein sources, catering to the booming demand for cultured meat.
• The company is the first publicly listed cultured meat firm, granting it a unique market position.

Negative

• Management does not expect to report positive revenues or profits in the short to medium term.
• Regulatory risks persist as cultured meat is not yet approved in most jurisdictions.
• Ongoing cash burn of $5.9m may accelerate with the establishment of a pilot facility, threatening financial stability.

LONDON, UK / ACCESSWIRE / March 15, 2022 / MeaTech 3D (MeaTech) is developing proprietary three-dimensional printing technology to be used in conjunction with its cultured meat process, which will enable the manufacture of premium meat products such as marbled steak. Alternative meat demand is booming and cellular agriculture could represent a new solution to the ever-increasing demand for protein. Cellular meat has the potential to significantly disrupt both meat- and non-meat markets over the next several decades.

Due to MeaTech's start-up nature, financial forecasts cannot be made with any certainty and management does not expect to report positive revenues or profits in the short to medium term. Uncertainty is compounded by regulatory risk, as cultured meat is not yet approved in most jurisdictions. As MeaTech is the first listed cultured meat company, it has no direct peers. Its net cash position was $30.6m at end H121. Given the free cash flow burn was $5.9m during the period, assuming no further acceleration in cash burn would suggest the company has enough cash for the next c 2.5 years. That said, the trend has clearly been an acceleration in cash burn and the intent to start to design and set up a pilot scale cultured chicken fat facility in Belgium during FY22 is likely to cause cash burn to accelerate.

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SOURCE: Edison Investment Research Limited

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FAQ

What is MeaTech 3D's focus area in the stock market?

MeaTech 3D specializes in developing three-dimensional printing technology for cultured meat production.

What are the current financial forecasts for MeaTech (MITC)?

MeaTech does not expect to report positive revenues or profits in the short to medium term.

How much cash does MeaTech have available?

MeaTech had a net cash position of $30.6 million at the end of H121.

What is the risk associated with MeaTech's operations?

Regulatory risk poses a challenge as cultured meat is not yet approved in most jurisdictions.

How long can MeaTech sustain operations based on its current cash flow?

Assuming no further acceleration in cash burn, MeaTech could sustain operations for approximately 2.5 years.