Hypercharge Hc:neo Has Best Solution To Keep 1 Billion Ev’s Moving

Hypercharge Networks (HC-NEO) is an EV infrastructure company that is aiming to go from the current year end projection of 750 to several thousand charging stations—and that’s just in the next year!

This is still a new industry, a baby industry, that is running hard to catch up to global EV sales. It’s a huge tailwind for investors.  What’s more, the industry is still fragmented in both the supply chain and in companies installing the chargers, so the Market is going to see LOTS of buyouts. 

THIS is a tailwind—10x growth in just 7 years:

Source: Markets + Markets – ELECTRIC VEHICLE CHARGING STATION MARKET- GLOBAL FORECAST TO 2027

Those buyouts are already happening, and valuations are rich—up to US$20,000+ per EV charger. 

That’s great news for Hypercharge—because it is listing its IPO—today!  Yes, this is as ground floor as it gets for investors.  Early stage investors from this time forward are getting

1. An established EV charger install base…
2. That’s growing very quickly…
3. Because their open-standards system is so simple and so powerful, it’s already replacing other EV chargers AND creating a recurring revenue stream with its bundled “Charging-as-a-Service” CaaS business model.
4. And a flush treasury with $6 million cash
5. Run by a proven CEO who almost doubled his own sales forecast in Year 1.

I want to do some math here for you.  Hypercharge is coming public with a C$36 million market cap, and C$30 million Enterprise Value with the $6 million cash.

Today, they’re in the middle of installing the first several hundred EV chargers. If they were lucky enough to get US$20,000 for the 750 that CEO David Bibby is installing by year end—which is what Blink (BLNK-NASD) paid earlier this year–that equals almost CAD$20 million!

Literally, in months Bibby has almost completely filled the valuation up take-over pricing.  That means every future EV charger the company sells adds more value to shareholders—immediately.

The real key for shareholders was getting Bibby as CEO. This seasoned operator has already built a team and executed a vision to disrupt the construction equipment industry for Finning Int’l (FTT-TSX), a C$4.7 billion market cap company.

Here he is now the CEO of a $30 million junior, with $6 million cash, a capital-light business model in an industry with a hurricane tailwind and he’s already installing hundreds of EV chargers a month.

Growth investors could not ask for anything more.  And this is Day One. IPO day. I’m long, and I think I’ll be able to tell my grandkids about this trade.

Bibby has almost doubled his own internal projections from a year ago.  The qualified demand for his turn-key EV charging solution—this is a capital-light software play that can go into almost ALL EV chargers – is now in the millions.

Hypercharge alone has seen its new business pipeline increase 30X in just the last year alone—because Bibby’s product is super-flexible, and makes money for everyone.

They are winning business EVERYWHERE—they have installs in 73 different locations spanning 7 Canadian provinces and one US state.

Hypercharge is installing their EV charging solution into large multi-residential buildings, commercial businesses that have dozens/hundreds of corporate vehicles and large fleet owners .

Just think of how big this opportunity is.  New ICE-fuelled cars are going to be phased out by 2035 in most places.  That means that we need charging locations for Every. Single. New Vehicle. that’s on the road.

FLEXIBLE MODEL, STRONG ECONOMICS

 The economics of this business are strong.  For companies like Hypercharge—which sells smart software, not dumb hardware–the revenue they generate is expected to be sticky, and recurring. Once Hypercharge is installed with a customer, they are buried within their operations.

CEO David Bibby says his model is “frictionless” for customers. Their solution manages everything for the owners of the EV charger, and the drivers of the EV vehicles.  That’s why he’s winning so much business so fast, and already replacing existing EV charger installs.

Hypercharge’s model is purposefully VERY flexible to suit all customers.  They sell or lease the hardware and the software,  generating revenue up front at the time of installation.  The real sweetness here though is in the recurring revenue stream that Hypercharge will then get year after year from its software and servicing.

What The Market Is Paying For Installed EV Charger Base

That recurring revenue stream creates a favourable valuation for small EV charging companies—there are SEVERAL companies who are just as happy to build their EV charging network through M&A.

There is a huge land grab for installations now—given the attractive recurring revenue model.  The more chargers you have installed the more your company is worth.   Again, once you are in—you win.
Here are the most recent acquisitions:

• Blink (BLNK-NASD) acquired EB Charging with 1,150 installed chargers for US$23 million.  That is a nice round $20,000 per installed charger.
• Blink also announced a deal to buy SemaConnect and 13,000 EV chargers for $200 million in June 2022.  That equates to $15,384 per installed charger.

Hypercharge—with a CAD$30 million market valuation on IPO day—has already sold and is now installing its first few hundred EV chargers.  Bibby’s sales pipeline is growing exponentially.  He has millions in the bank to fund his growth.

Appreciate the value in acquiring these EV charging locations—it really is much like buying a toll bridge.  Once that charge point is in place it is likely to be there for a long time spitting out predictable, steady, high margin cash flow.

Capital Light Business Means Huge Leverage To Growth

Hypercharge doesn’t manufacture chargers.  They are hardware agnostic which means that they don’t have to force a certain product on anyone.  They provide the customer with the best solution—whether that is a 7.5-kilowatt charger for your home or a 350-kilowatt fast charger.

Their EV charging software is incredibly smart.  Hypercharge’s “Plug-in Charge” will integrate with a fleet dispatch system, fleet cards, with loyalty programs, and with membership programs among other things.

Hypercharge handles all of the billing for the customer, all of the payments, all of the allocation of energy. 

The property owner doesn’t have to do anything.  For that, Hypercharge has annual recurring revenue by way of a recurring monthly contract and transaction fees.  This is Software-as-a-Service—SaaS, except they call it CaaS—Charging-as-a-Service.

Most of Hypercharge’s existing customers are in Canada where the competition is sparse relative to the US, and they have a chance to dominate. 

Realistically, there is so much demand coming for EV infrastructure that we are going to need lots of companies to step in and carry the ball.

Hypercharge also just moved into the United States and is starting to ramp-up there.

CEO  Bibby very successfully led a team at Finning (FTT-TSX) that took much of the company’s business online, cementing their market position.

But he is WAY MORE MOTIVATED at Hypercharge—because he owns millions of shares.  He has “skin in the game”.  And he is already delivering big revenue gains quickly.

What Bibby is overtly trying to do at Hypercharge is—build something that is attractive for a big player to come in and pick up.  The more chargers he gets installed, the more valuable his company is likely to become—and he is installing them quickly.

Until then he is aiming to continue to scale.  He has BIG plans, and he is executing.

Hypercharge is a company that is successfully executing in an industry that doesn’t have so much a rising tide lifting it—as it has a tsunami of water coming in that is propelling all of the players.

The growth projections for the industry that are floating around are truly incredible.  The number of installed chargers in North America is predicted to increase upwards of tenfold in five years. 

The CAGR—Compounded Annual Growth Rate—for the next decade is over 40 percent.

There is a ten-year government sponsored sprint to build out the EV charger infrastructure.

How can a young industry ramp up fast enough to handle that?  There is room for many, but I see Hypercharge as the single best growth story in this sector.  With a first class CEO, a treasury to back him and the prospect of hundreds of EV chargers being installed each month… the only other think I could ask for is the chance to be a shareholder on Day 1 with a fair valuation—no big premium.

And at CAD$30 million Enterprise Value and several hundred chargers already sold across 7 provinces and one state—I get that too.

This is one of my larger positions.  I think Dave Bibby is one of the best CEOs I’ve ever seen in a micro-cap.

He is proving himself quickly, and I get to ride his coat-tails as he grows this business.

But understand I’m a junior high growth investor.  There is always risk in small companies.  I don’t add any value to you writing about IBM or Microsoft.  I work to find the best small cap teams in the best sectors with the best valuations.

I think for growth potential—what Hypercharge is looking at today and is already realizing in real time—is very encouraging. 

I’m long and I’m charged up!
 
Keith Schaefer

Disclaimer

FORWARD-LOOKING STATEMENTS: This article contains certain forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, are forward-looking statements.

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