BALLERUP, Denmark - LiqTech International, Inc. (NASDAQ: NASDAQ:LIQT), a leader in advanced filtration technologies, has partnered with Jiangsu Marine Equipment Co., Ltd. (JiTRI) to launch a joint venture aimed at the Chinese marine water treatment market. The new entity, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd, will operate out of Nantong Haimen, Jiangsu province, focusing on membrane-based water treatment equipment for marine ships using LiqTech's silicon carbide ceramic technology.
LiqTech, holding a significant market share in marine scrubbers, will be the majority owner of the JV, bringing its expertise in marine water treatment solutions. JiTRI, a research institute known for fostering technological innovation, will hold a minority stake, contributing facilities, local support, and funding for initial operations and commercial activities.
The collaboration is set against the backdrop of the marine shipping industry's shift towards cleaner fuel applications, with a growing number of new vessels featuring dual-fuel engines requiring dependable water treatment for exhaust gas recirculation systems. With 400 new vessels ordered between 2024-2027 that plan to incorporate EGR solutions, and China commanding roughly 80% of the global shipbuilding market, the JV is poised to address a significant demand.
Fei Chen, CEO of LiqTech, expressed confidence in the partnership, highlighting the opportunity to expand their presence in the Chinese market by combining LiqTech's solutions with JiTRI's regional strengths. Mr. Luo Benjin, Vice President at JiTRI, echoed this sentiment, emphasizing the potential for advanced water treatment technologies to contribute to the green transition of marine shipping.
LiqTech's filtration products, known for their efficiency and reliability, have been implemented in over 170 marine water treatment systems worldwide. The company's silicon carbide membranes are renowned for their performance in demanding purification applications, including controlling diesel exhaust emissions.
This joint venture represents a strategic move to capitalize on the evolving environmental standards in the maritime industry, leveraging LiqTech's technological leadership and JiTRI's local expertise. The information for this article is based on a press release statement.
In other recent news, LiqTech International, a clean technology company, has experienced a series of noteworthy developments. According to Lake Street Capital Markets, the company's price target has been revised from $10.00 to $9.00, although a Buy rating is still maintained on the stock. This adjustment was made in light of recent events, including LiqTech's capital raise of $10 million, which is aimed at supporting growth initiatives and meeting working capital needs.
LiqTech's Q2 earnings indicated a 10% decrease in revenue compared to the same period last year. However, the company anticipates growth in upcoming quarters, driven by increased activities in oil and gas, marine scrubber, and swimming pool markets. In addition, LiqTech has secured a significant order for a pilot water treatment system in the US and is establishing partnerships to expand its market presence.
The company has also been actively building partnerships to become more competitive in the Korean ship market and is developing new channels and opportunities to expand its system aftermarket solutions. These recent developments reflect LiqTech's ongoing efforts to navigate the market and drive future growth. Lake Street Capital Markets remains optimistic about LiqTech's prospects, expecting the company to show promising developments in the near future.
InvestingPro Insights
As LiqTech International, Inc. (NASDAQ: LIQT) embarks on this strategic joint venture in China, investors should consider some key financial metrics and insights from InvestingPro.
The company's market capitalization stands at a modest $11.28 million, reflecting its current position as a small-cap player in the filtration technology sector. Despite the promising partnership announcement, LiqTech faces some financial challenges. According to InvestingPro Tips, the company is "quickly burning through cash" and "suffers from weak gross profit margins." This is evident in the company's financials, with a gross profit margin of just 12.47% for the last twelve months as of Q2 2024.
Revenue for the same period was $17.72 million, with a growth rate of 8.53%. However, the company reported an operating loss of $8.14 million, resulting in a concerning operating income margin of -45.91%. These figures underscore the importance of the new joint venture in potentially improving LiqTech's financial performance.
Another InvestingPro Tip notes that "analysts do not anticipate the company will be profitable this year." This aligns with the reported negative earnings per share of -$1.58 for the trailing twelve months. The stock's performance has also been challenging, with a one-year price total return of -53.52% as of the latest data.
Despite these headwinds, there's a silver lining: LiqTech's "liquid assets exceed short term obligations," which could provide some financial flexibility as the company pursues growth opportunities like the Chinese joint venture.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for LiqTech, providing a deeper understanding of the company's financial health and market position.
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