Diamond Equity Research has initiated coverage of Blue Star Foods Corp, projecting revenues of USD 222 million for its RAS business in seven years.
Diamond Equity Research wrote that it is being compensated by Blue Star Foods Corp for producing research materials regarding Blue Star Foods Corp. and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research.
BSFC expects to complete the uplisting process by Q3 this year.
The Miami-based seafood company sells refrigerated pasteurized Blue Crab meat and other premium seafood products.
It has also signed a definitive agreement to acquire Taste of BC Aquafarms, a family-owned and operated land-based Recirculating Aquaculture Systems (RAS) salmon farming operation, based in Nanaimo, British Columbia, Canada.
Equity research firm Diamond Equity Research has initiated coverage of BSFC. The firm, which has focus on small capitalisation public companies, wrote that BSFC has “significant growth potential” thanks to its focus on “the highly disruptive and high growth recirculation aquaculture system (RAS) market”.
It valued the RAS business at 5.5x forecasted 2026 revenue.
Producing just 100 tonnes currently, Taste of BC Aquafarms is currently carrying out site selection for its new 1,500 tonnes a year expansion, expected to be completed by 2024.
It said that it expects to reach capacity of approximately 1,600 tonnes-a-year by 2023. Then 3,100 tonnes by 2025, 5,750 tonnes by 2026, 11,750 tonnes by 2027 and 20,750 tonnes by 2028.
USD 410 million
“However, RAS is highly capital intensive and BSFC may need to seek financing options to fund its expansion plans. BSFC expects total capital expenditure of around USD 410 million by 2028,” it was written in the research report.
“Based on Fish Pool forward prices, the price of salmon is expected to be in the range of USD 6.30- USD 7.00 till 2024. We have assumed similar price range for BSFC’s product. We also expect a significant capacity increase and production pickup from FY 2023,” wrote Diamond Equity Research.
Diamond Equity Research wrote that it is being compensated by Blue Star Foods Corp for producing research materials regarding the company and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research.