Sylvania Pl Share Chat (SLP)

Bangrak, all valid points brother and good to hear your views. They're well considered. I just don't believe for one moment the transition to 'green energy' is going to be anywhere near as fast as some prospectors would have you believe.

Far, and I mean far too much, massive, industrial scale structural upheaval for it to be a quick, or even smooth transition. The green lobby have been green lobbying for 50+ years. I expect them to continue to do so for another 20-30 yrs at least before green energy dominates the BRIC nations along with North America. And that is very much my own opinion.

And for the above reason alone, I believe an investment in SLP will only reap rewards before that full green domination.

I'm not worried I just think you're missing something. Ok assume they don't and they all carry on buying cars....The trend of vehicle sales in china has declined yearly since 2018 from 30m. Jan-June 2020 10.25m vehicles had been sold 3.8% of those were new energy vehicles. In the same period in 2021, 12.89m were sold, and 9% were NEV. This year 12.05m were sold and 21% were NEV. (info from CAAM site) As I said before my friend has just ended his contract building plants for BMW in China and in his words "it's all-electric now" clearly it's not as 79% was ICE but the trend is there to see. You won't get many institutions wanting to get into an industry that is manufacturing something that is in a decline. However, if something goes wrong in this green energy transition (as it has with oil gas, and coal in the last year) the price could rocket if there are not enough minerals to make batteries and more cat converters are needed. This is a bet on Rhodium, there is no deficit now like 2020-21.

Bangrak, don't worry about me brother I've got a well-oiled global online fitness operation along with various other income producing interests :)

The point you make is fair, but I disagree with your pessimism and disagree that China will be too affected :) As nimrod has just posted, the nouveau riche in China (which is a helluva lot of people) don't give a monkeys about recession and will continue buying cars... I also don't believe that a global recession is inevitable at all but could be wrong. And if we do land in one I think it will be short, sharp and sweet... I say sweet, as there's never a better time for making money if you know how :)

http://www.chinadaily.com.cn/a/202208/04/WS62eb28f0a310fd2b29e703e7.html
should

Simple question, what is the % contribution from rhodium sales to the overall gross revenue of the company? Been looking but can’t find this anywhere except read somewhere that a year ago the combined contribution of rhodium and palladium was 72%. Some Forecast prices for rhodium are double in 12mnths so clearly this would have a big impact on revenue if the % contribution was significant.

Stoo. The SP is struggling at the level I said to watch a few weeks ago, I know why this is happening, and I've explained this.

There is a global recession about to happen triggered by high energy costs originating in the EU, but it will spread as all economies are linked, many people/businesses will struggle to pay bills, strikes likely, and discretionary spending will be cut back, among other items like Holidays, Nightclubs, Gym memberships (and Personal trainers I'm afraid ;)), cars are usually not bought. When Rh is used mainly in cat converters for ICE vehicles mostly in China, what upshot could there be for Rh considering these events and its contribution to the profits here minus high smelting costs?

Thanks, Velo

Try this link with wwwdotedisongroupdotcom.

https://*********/wp-content/uploads/2022/08/Sylvania-Platinum-Excellent-Q4-production-but-lower-PGM-basket-1.pdf

... 169p

They say PGM's will recover in 2023 due to pent-up demand from the vehicle industry.

It's a free to view, paid-for by client broker, but that's their opinion this morning.

https://*********************/companies/uk/precious-metals/sylvania-platinum-ltd-/research/edison/sylvania-platinum-excellent-q4-production-but-lower-pgm-basket/3_31171xxx-1fec-0390-c7fa-8030600b176d

Due to the Q4 update they've reduced their EPS forecast by 12.5% for the Sept 8th reveal. That's pretty much why the SP was flat on the Q4 results - results were la little less than THEIR forecasts.

Analysts forecasts - market takes them seriously and reacts accordingly, whilst in a trading year but when reviewing historic multiple years, no one is interested in the misses of analysts forecasts only the actual results to get an overall picture.

Rh might be steady, but nice gains today on Platinum and Palladium

Quiggers and Bangrak,

While I appreciate your posts, they're always slightly skewed for me. You mention the price of Rhodium forecast over the coming years to drop considerably... but fail to mention the upshot of this?

That being, where the cost of platinum goes in this situation! Use your same indicators if you want :)

I'll be even happier if that situation plays out. Platinum at $10,000+ serves us fairly well :)

quiggers,

in the good old days, when institutions were legit and you could put some sort of trust in them, forecasts for rhodium like that might be believed, however today with just about all of them talking absolute crap, I just completely ignore them.

too many "authorities" just talking stuff down and up for their own benefit, best to go with gut feel, resources only going 1 way for the foreseeable, unless some miracle technical breakthrough (wont happen)

The resources in this world are not infinite.

Some materials are needed to ensure life remains sustainable.

It is unlikely that we turn a fossil fuel economy into a solar or hydrogen powered one by 2030.

Worth giving this some thought.

Final word from me. Promise.
Fitch, July 2022, assume Rhodium at :
$13,500/oz in 2022
$7,500/oz in 2023
$6,000/oz in 2024 and
$4,500/oz thereafter
Therein lies the reasoning for negative growth it seems.
Let`s hope they are wrong in their assumptions!
GLA

Before I get lambasted (or worse) I should point out I remain optimistic simply because as of today the market is valuing SLP from a base of say $60m earnings assuming no growth at all, quite the reverse: negative earnings "contraction" of (7%) annually over next decade, on a discount rate of 17.5% and a terminal multiple of today`s PE of 3.5.
That is implying utter meltdown (no pun intended) of PGMs. So somebody`s story is woefully wrong. Either they are right or we are all wrong. Or vice versa.
Time will tell of course!

Net Profit 2022 $Ms| `23 | `24 | `25 | `26 | `27 | `28 | `29 | `30 | `31 | `32| Terminal Value | -7.00% Y1-5
** $60.8** |56.54| 52.58| 48.89| 45.47| 42.29| 39.33| 36.57| 34.01| 31.63|29.42| 102.98 | -7.00% Y5-10
Present Value (PV): |48.12 | 38.08| 30.14|23.85| 18.88 | 14.94| 11.82| 9.36 | 7.41 | 5.86 | 30.47 | 17.5% Discount rate
Sum Net PV: 238.97 | 3.5 Multiple

I don`t think it is as simple as basket price measurable as against P/E. In 2016 for example, LSE shows SLP PE at 7.46. In that year the Group reported a basket of $850 on sales of $39,510,771 and net profit of $ 3,733, 535, a net profit margin of 9.45%.
Fast forward to 2021 where the basket was 4.33 x higher than in 2016 (it was $3,678) and we all know why. So if you do the math, 4.33 times 2016 earnings = $16.15m. That is like for like and ought to have been reflected in the PE all else being equal.
But SLP actually earned 6x that amount - $100.4 m and yet their PE dropped to only 3.2!!!
This - to my mind - makes no logical sense at all. It tells me the market hates the fact that SLP don`t get paid for 4.6 months (5 year average). They have zero pricing power. They lack growth ambitions. They are at the mercy of macro factors 100% outside of their control.
I agree with Luna and have said it before and have been shot down.
The market values growth. It values pricing power. Or it values a quick buck - just look at the scam which is SYME and how a legal Ponzi Scheme just keeps rolling them suckers in with another 60% + blue day yesterday.
SLP have smashed the numbers out of the ball park. They have a fabulous management with skill and discipline. They are exemplary. I love their accounts and transparency.
And yet the PE has not budged commensurate with earnings. At least not on the numbers above.
For me this is disheartening. I really hope we get some positive news about the projects and a direction of travel as to what BoD intend to do with their cash pile.
GLA

At some stage, it's Sylvania that has to grow, not the price of Rhodium.... or increase the dividend.

I wonder whether the BOD are considering becoming a chrome/PGM miner directly, rather than simply being a tailings reprocessor.

Unser this light, building this cash position makes sense.

Go here to capture average historical pe ratios https://www.londonstockexchange.com/stock/SLP/sylvania-platinum-limited/fundamentals (5.26). look at this year's results from the last 4 quarters and work out PE ratio for this year (almost exactly the same) Therefore if you can work out the profit using the basket on a daily/quarterly basis then you can work out where this will go. On Rh at $16k this SP is about right. Watch Rh wait until it passes the 200 day then have a look again but what did Heraeus say about the surplus in Rh?

Well the SP close of July was below my expectations.
So am retracting the 107-ish estimate for August SP close and now only looking for circa a £1.

As others have pointed out, the trading achievements are exemplary, If you take out last year's record breaking performance then this year's full year (via adding the quarterly results) means that net profit has smashed all previous years - bar last year's record breaking performance!

The SP on the other hand, got itself mired in the market's analysts forecast expectations and look on paper as if they've come in below target. Yet as time moves on and market forecasts are forgotten, this year's results will still be stand-out by beating all previous years bar last year.

I'd like August to show it's past performance capabilities, and prove my £1 SP expectation way too low for the month ending August.

Still a way to go until chip issues fully resolved. Net profit shows the current Rh prices for the past 12 months are healthy enough for contributing to good profits.

Quite the buzz on FinTwit about PGMs folks - the COMEX Platinum cupboard is about to be emptied I'm hearing.

nimrod, long time brother hope you're well. You see it as it is. Just like me.

What an incredibly well run and stupidly profitable company. I'd like to buy it :)

its another well done bravo performance by the management and all members of the workforce; profits like this are not accidental in these uncertain times.

Nearly 50m£ profit.
£100m cash
£230m mkt cap

It all looks rather undemanding. But, as ever, it's all about the forward basket price. And now about forward cost management too. Jaco and team are right to flag this.

Chip shortage bottleneck done? Maybe. See the article I posted under the title "Gentlemen, start your engines"

Typo!
"after adding this Q4 update now reading as $161.883m for Revenue, a small miss against target forecast? "

Should have been $151.883m not $161.883m as posted in that para.

It's all correct where posted, just that sentence where I hit a '6' instead of a '5' even though it's correctly mentioned elsewhere in the post..

Time only to zero in on the top and bottom lines.

Today’s Q4 trading update doesn’t appear to line up with the in-house broker’s analyst’s pre-emptive publicised analysis of Q4 ahead of today’s publication.

Revenue and Net profit were never going to be greater than last year, but headlines of ‘best Q4 in 2 years’ did lead me to think that the Q4 would have performed better than prior market forecasts (maybe I’ve missed a market forecast?)
Because I’m looking at expectations of a full year market forecast expectations of Revenue - $163m
And
Net profit forecast expectations of $62m.

Instead, I find Revenue (barring any tax/depreciation, adjustments that may appear only in the Sept 8th full report) is after adding this Q4 update now reading as $161.883m for Revenue, a small miss against target forecast?

And Net profit for the full year of $59.342m, also a small miss against target forecast.

Was thinking the top line and the bottom line were heading to slightly beat forecasts, instead It looks to me like a miss on both.
The market response appears a little lacklustre too.

I’ve probably made an error somewhere, so will wait for the Sept 8th audited full results in case there’s bits and pieces of adjustments that are not shown in the achieved quarterly updates which I’ve used below –

REVENUE:
H1 = $69.056m
Q3 = $47.881m
Q4 = $34.946m

Full Year Revenue = $ 151.883m

NET PROFIT:
H1 = $24.360m
Q3 = $21.165m
Q4 = $13.817m

Full Year Net Profit = $ 59.342m

lovely inverted head a shoulders pattern forming too, we know where it goes after that, usually

slight dip in rhodium recently but palladium and plat coming up on the rails, but with recent dollar weakness (if the boe, boj, swiss bank, swedish banks pull their fingers out) might get even better