Oman Desalination Makes Modern Water ‘Strong Buy’ at Nomura
Modern Water Plc (MWG), a British developer of desalination technology, was rated a “strong buy” by Nomura Code Securities analysts, who said the company has proved its forward osmosis method is commercially viable.
Ken Rumph, an analyst at Nomura, said the Guildford-based company with a market value of 22 million pounds ($35 million) is well financed and undervalued at the current price of 38.5 pence per share. His target price is 180 pence.
Modern Water opened a 500,000 pound ($800,000) commercial desalination plant in Oman last month, the world’s first to use forward osmosis technology, which is 30 percent cheaper than conventional reverse osmosis, according to the company. The Middle East will be spend more than $50 billion a year on water treatment by 2016 compared with $30 billion in 2009, according to Global Water Intelligence, an industry analyst.
“The potential market is huge and they’ve proven that it works on a commercial basis,” Rumph said by phone today. “They have plenty of cash on the balance sheet and they’ve got a better product than everybody else.”
To contact the reporter on this story: Ben Edwards in London at bedwards35@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
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