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Morning Wolves, you make some very good points. It will be interesting to see how much information we are given regarding number of shares and percentage. This would normally come in a prospectus so perhaps this is already to go. I cant recall if PHE have ever gone down this route offering parts of the company to PI's as I am thinking they have not so hats off to HUI. Glah
Hi Sharesport
I have absolutely no doubt that there has been a lot of interest in HUI IPO by PHE shareholders. Me included. Expressing an interest however is significantly different to actually buying the share to be issued in the IPO. I have set money aside to buy but the shares will have to be at the right price and for an acceptable proportion of the company. Each of us will have different parameters for what is acceptable. I would rather my money go directly into funding HUI but not at just any cost. The valuation has to be realistic.
Regardless as to whether I buy shares in the IPO, as a PI I would like to thank Aleksandra and Howard for the opportunity to participate. It would probably have been so much easier for them to have gone to a small number of large investors only.
Wolves
Hi Wolves, my very simplistic approach considers that the DMG 'development' work is completed and that HUI are going to use that very same technology. PHE MCap was circa £185M for UK and other territories so on this basis I thought roughly a quarter of that was reasonable given the multiples of units that have been mentioned. That said valuation is difficult without the number of shares and percentage as you stated. So my reasonableness valuation is a bit of an educated guestimate based on history, potential and IPO interest of which I believe has been healthy. I will be partaking in the IPO if I can. All Just my opinion and not advice for anyone. Things need to start moving on FOAK at Protos but HUI do seem very proactive and I like that.
Hi Sharesport
Just to add one relevant point. In theory PHE is targeting c 7.531 billion people with its DMG. If you combine Bulgaria, Greece, Hungary and Poland populations they come to c 65m. That is less than 1% of the worlds population. On Friday PHE's Market Capitalisation ended at c. £186m. I don't believe you can compare the market value of the two companies by looking at target market size there are far too many other variables to consider. A most simplistic example of this is tonnes of waste plastic produced by size of population, often associated with wealth and a throw away culture. It is very uneven across the world. Therefore all target markets are not equal.
IMO the potential of PHE and HUI is massive, but it remains currently unrealised potential. HUI look as though it may have an opportunity to change all of that, I very much hope it is successful.
I look forward to others responses.
Wolves
I was contacted by Gavin Burrell, he told me 10k was minimum, I said I was thinking 5, 10 was too much, he said I’ll log you as 5 to 10k. I thought 7.5 was on the high side, but get the point about depending on % of company etc
Hi Wolves, thanks for your post. I will give it some thought and see if there is anything I can add to it / offer another viewpoint / confirm agreement with your thoughts today at 15:05.
LedZep. I was contacted by Gavin Burnell
Sharesport, thank-you for your reply Fri 22:29.
Without access to the accounts of HUI the baseline valuation I have estimated at £2.5 - 3.0m. This is the cash from the pre IPO fundraise. All other costs for company set up etc I regard as sunk costs and irrelevant to any valuation.
The next stage is to value the other assets of the company. There are probably few physical assets so I have taken this to be nil.
There is potentially value in the signed contracts with PHE being a sol partner in designated countries, Poland, Hungary & Greece. Correct me if I am wrong but I'm not sure if Bulgaria has been licenced yet. The value I have applied at this stage is £1m per country. Say £3.0-4.0m in total.
Linde contract for exclusivity has a zero value for me. However entering into contractual arrangements with HUI de-risks the company as you would have expected them to have undertaken due-diligence. This is worth to me £2m.
The energy of the BOD of HUI but allowing for the risks allows me to apply goodwill of between £1-3m. (I accept that some may think this is rather light, but I don't. With the model that appears to be followed there may be a dependence on EU grant moneys plus local contributions or matching. What happens if these grants are pulled due to EU cash flow issues or political /military risks?)
I therefore have a pre valuation of between £8.5 - 12.0m.
I have not included an allowance for the expected returns for the projects as at this stage they are a WIP and I believe there is a lot to do before they become a reality. Current risks are not just HUI's they start with PHE and the DMG working as stated.
Moving on to the IPO, the offer price, the number of shares to be issued and the percentage of the company they represent are highly important to me.
IPO for £7m -8m for c. 50% of HUI. My valuation after IPO c.£15.5-19m. Provides funding for 2-3 years.
IPO for £20m for c.70% of HUI. c.£30-35m. Would provide general funding but also enough to buy a DMG if other sources of funding are lost ie. EU Grants.
IPO for £30m for 80% of HUI. I would expect this to achieve a valuation of c.£45m as the cash is sufficient to see the project through to completion and probably leave some spare in the bank.
All the above are my own projections and in no way should they be taken as offering any financial advice to others. They are specific to my thought process only and I will be very happy to have them analysed by others and discussed/rubbished.
Please however include for others whether you already have shares in HUI so comments are transparent. I currently have no shares in HUI.
DYOR
Wolves
Just a question:
Of those who have registered an interest in the HUI IPO with Novum Securities, has anybody been contacted/telephoned by anyone other than Jon Belliss?
It's just that, ringing individuals appears to be a bit of a labour intensive approach for a £30m floatation, for one chap.
Oh, I get it, that there should be Insti Investors and HNWIs taking a large slice of the float, but still a lot to do.
Thanks Jacob, I got the £5k minimum during a conversation with Jon yesterday also. There have already two different proposed valuations posted on this board so lets see what develops next week.
Just over £30m valuation I had a conversation with broker handling it and minimum is £5k. Going live during the course of next week, but you will have to signal your interest prior to the broker to be included I think
Too l8 for ipo? What is min amount? What is deadline pls?
Hi Wolves,
I have not and it is just my initial opinion based on the proposed valuation referred to by Moggy. It is not backed up by any analysis. Would be interested in other opinions as to whether it is thought to be reasonable or otherwise. Not sure how they could come up with an MCAP without IPO take up known.
Sharesport re post 20:08
Based on your view of reasonableness relating to a market value stated by Moggy1 post 19:22 today:
Do you already have money invested in HUI either from its original/post set up and/or from the pre IPO funding round?
Wolves
Thanks Moggy, that valuation seems reasonable to me based on potential rollout as they seem to be pretty proactive. Lets see what information comes out and how it develops but is certainly interesting and exciting times. PHE are valued higher, are awaiting financial close and have planning permission.
Hi sharesport, I was told the IPO valuation would be around £45m when I enquired about it.
Hi Moggy, where does your £45M Valuation come from please.
Yes, £45m valuation seems very top heavy to me for a company with no planning permission or financing agreed.
Ah yes totally understand.
Gunst
It really depends on the number of shares to be issued and the percentage of the company they represent. Until we know that it is meaningless.
Wolves
The warrant is for 15p, did I understand him early on the telephone call?
So we can buy in at 15p within an expiry date?
Does anybody feel 7.5p could be quite expensive to start with?
Hydrogen Utopia (HUI) who will be using PHE DMG technology.
Sorry, did I miss something, who is IPOing?
Jon Bellis at Novum Securities called me this morning. Documentation to sent out toward end of next week 7.5p / 1:1 15p warrants.
Call
From who?