Edison Investment Research Limited: MeaTech (MITC) - Initiation: A meat revolution

London, UK, 15 March 2022

MeaTech (MITC) - Initiation: A meat revolution

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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