Tuscan Holdings Corp (THCB)

[StocktraderDK]

$THCB - Microvast - What I believe to be a hugely undervalued EV play
DD (New Claims/Info)
Microvast DD

THCB is a Special Purpose Acquisition Company (SPAC). The price peaked yesterday on Feb 23rd and has dropped back to the $17-$18 level today. I have decided to share my detailed Due Diligence where I’ve touched on a number of key points and made my argument as to why the Reward outweighs the Risk with investment in this SPAC.

TUSCAN HOLDINGS $THCB

Tuscan Holdings has signed a Definitive Agreement to merge with Microvast.

The CEO Stephen Vogel is a very successful businessman and has a lot of experience with acquisition companies. Notably he was executive chairman at Forum merger Corp and Chief Financial Officer & Director at Subversive Capital Acquisition Corp.

The overall valuation of the deal was at $3b (when the stock was at $10) so the valuation is currently between 5b-6b

MICROVAST

Founded in 2006 Microvast have established themselves as market leader in the development and manufacture of fast charging, long-Life battery systems with superior safety for electric vehicles.

Microvast's batteries have supplied a range of e-buses, vans, trucks, passenger vehicles, automated guided vehicles, forklifts, and mining trucks. The company has installed batteries in 28,000 vehicles globally and even supplied buses at the 2018 Seoul winter Olympic Games. This international exposure puts Microvast at the top teir of EV suppliers.

Figure 1-Microvast worldwide application

They have recently released information on a new fast charging battery (HnCO-AH) with a high energy density of 265Wh/kg giving a decisive competitive advantage over current cells for the commercial vehicle sector that have an average density of 240Wh/kg.

in July 2020, Microvast completed construction on a production facility in Ludwigsfelde, Germany (close to potential future clients such as Mercedes-Benzes). The company said it plans to start production in March 2021 to begin making the new battery modules and packs for European customers. Recently the company has posted 77 new jobs for this facility.

Figure 2- Microvast German facility plan

In its new plant, Microvast is expected to put together parts made by the company's manufacturing facility in China. At first, the production capacity for the new factory is expected to be 1.5 GWh per year. However, it is expected to ramp up to 6 GWh per year with 250 employees. The new German facility will also function as a research facility and the company’s European headquarters. Microvast said it had invested approximately 50 million euros in the project.

The company have received credit from the prestigious R&D100 awards for their pioneering design of battery components optimized for high performance and uncompromising safety. This award undoubtedly lead to the United States Advanced Battery Consortium LLC (USABC), a subsidiary of the United States Council for Automotive Research LLC (USCAR), and a collaborative organization of FCA US LLC, Ford Motor Company and General Motors, to announce a $4.5 million contract to Microvast to lead a program to develop low-cost/fast-charge batteries for electric vehicle application.

Partnership with Oshkosh



Microvast currently exists as a private company and it is still a relative unknown as to how the company is performing financially. The CEO Yang Wu however stated the company expects to generate more than $100 million in revenue in 2020.

Investor presentation

http://www.microvast.com/upload/2021/02/05/16125326719819fmnxa.pdfhttp://www.microvast.com/upload/2021/02/05/16125326719819fmnxa.pdf

Have a look at their latest investor presentation which talks about their tech, future pipeline, and plans for the future. It's truly remarkable stuff.

Why buy $THCB

There are a number of reasons why I think THCB is a good buy. At current prices

THCB and Microvast tick several boxes.

EV Battery play (EV hype). QS who won't have a product until 2025, is valued way higher than THCB currently is.

Multinational company with 2 factories in China and one nearing completion in Germany, hoping to start production in Spring.

Amazing technology with recognition from the prestigious R&D100 awards for its new high density and safe battery.

Projected revenue's of $100m for 2020 (Big positive, SPAC company that has established supply chain and revenue)

low public float (27M shares) with 75.69% institutional holdings and 20.85% insiders. There is also touted to be overwhelming interest in this SPAC in Asia (China, Japan, South Korea) by all accounts, and if true, Chinese hedge funds will make this parabolic on ticker change. (this basically means demand > Supply for shares).

Microvast as a company have a high projected growth rate which will be accelerated with capital from merger.

Partnership with Oshkosh who just received the contract to build USPS delivery fleet. (yes the contract that WKHS was pumping on).

Conclusions

Microvast has a excellent product already in production and are generating revenues, this gives it huge upside potential in the short-term.

Long term I can see the company expanding production into the states given the interest shown from the USABC and has the potential of forming partnerships with several big automakers, especially now with the factory in Germany. This has already started with the partnership with Oshkosh who won the contract with the USPS.

At current prices I think this is a steal hence I have decided to share all this information with you. IMO this is the best opportunity I've seen in the market in years. I'm excited to have a huge amount of my portfolio in this.

Good luck all, I would appreciate any feedback or other information regarding THCB or Microvast I may have missed and you feel is important.

EDIT: THIS COMPANY HAS 43% SHORT FLOAT CURRENTLY

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Links

https://www.bloomberg.com/news/articles/2020-11-12/microvast-is-said-in-talks-to-go-public-via-tuscan-spac-merger

https://moneymorning.com/2020/12/15/is-microvast-stock-a-buy-after-its-spac-deal/

https://www.electrive.com/2020/12/18/microvast-announces-fast-charging-utility-vehicle-battery/

https://www.azom.com/article.aspx?ArticleID=19793

http://microvast.com/index.php/news/info/109

https://auto.economictimes.indiatimes.com/news/auto-components/ev-battery-maker-microvast-to-go-public-through-spac-merger/79218830#:~:text=Microvast%2C%20whose%20batteries%20powered%20the,Wu%20said%20in%20a%20statement.

https://uk.finance.yahoo.com/quote/THCB/holders?p=THCB

https://spacinsider.com/stats/


Source #r/epicDD