Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
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Mike, love your post particularly the first sentence!
Hi Sotolo, … but you can look too far forward....we are all going to die and the world is eventually going to end. At the end of the day we all need some perspective.
The Q3 numbers do matter at they are a guidance for Q4 and then a guidance for 2023 and on and on and where the business is heading and the credibility of the company and its management.
Based on the current expected EPS for this year the PE is now below 2.5 and still I think below 4 for next year building in my expected PGM prices for next year.
Since the THS shares first started in 2016 the 200 day moving average has remained above 100p all the time except for the first 13 months of the Covid outbreak.
Chrome is still holding up well.. Total Chinese chrome consumption in the first half of this year was 8.53 million tonnes up 20.48% on the same period last year and chrome stocks in Chinese ports have been steadily falling since late April ( reported on 1st July as 2.198 million tonnes, down 122,000 tonnes from the week before).
Yes, i agree the forward picture does not look too rosey but as I say, let us have some perspective on the PGM price.
Yes the rear view mirror shows fields of roses
Q3 (April to June) Production report is out Tuesday.
I am looking for PGM production to be about 44,500 ozs and chrome 430,000 tonnes (hopefully Vulcan is now running at over 80% capacity) with the PGM basket $2676/oz (Karo $2113) and chrome $282/tonne.
Fingers crossed!
Mike thanks, hope you are right! Anyone her notice slp tumbling the past couple of days, is that catch up after their share buyback, that has been propping up the pric, ends; finally worrying about falling PGM prices to which they are entirely exposed or something more ominous?
Hi Sotolo, I assume the long-term prices in the PP presentation (PGM basket $1630-1666/oz and Chrome $145-150/tonne) are just concensus figures from several sources based on the past and are not from me or presumably not from THS. I would suggest that THS will be much more bullish on both (otherwise why invest in Karo). As for me, my reply to you on 16th June below was that I do not see he PGM basket falling more than 10% in the next 12 months from around $2400/oz so my current bold prediction for the PGM basket NOT to fall below $2160/oz and I think the picture for chrome is even better and will not fall below $250/tonne. On that basis the 2023 EPS could be 25-30 cents or very roughly half of the EPS for the current year. I stress these are purely my own figures and we have a long way to go, DYOR. Prices could even be be higher next year if the expecting recession is avoided. I see that Glencore is up today after JP Morgan indicated China should bounce back over 7% quarter on quarter in the second half of this year.
Thanks Mike, however a quick question, you say profits go near zero with PGM basket at $2000 and chrome at $200, yet in a slightly earlier post you report management predicting 2023-2034 PGM basket $1630-1666/oz, and chrome $145-150/tonne. Are they and you predicting large losses, or have you got the break even price much too high even with inflation? Thanks
Hi Mike great answers very much appreciated, thankyou. Yes eps estimates are from market screener.
Hi Freedom4Uall- good questions!
The current financial year finishes at the end of September and so is pretty much 75% locked in, if prices remain as they are at the moment then I expect EPS to be 53 cents which is substantially better that the figure you have of 40 which I assume is from a brokers calculation over 6 months ago. This makes the current P/E below 3.
Going forward the big questions are 1) where are PGM and chrome prices going .
2) when are costs going
3)will the Karo project deliver as planned.4) What is the future for the internal petrol/diesel cares needing catalytic converters and will the potential massive demand for green hydrogen take off as hoped.
For 1) it depends on where you think we are in the economic cycle and would a recession reduce prices dramatically lower -see the valid comments below from Sotolo.
For 2) I still expect costs to increase over 10% next year although slightly higher volumes will slightly offset this.
For 3) Karo is a massive project for us and potentially triples our PGM exposure with no chrome. Will the project deliver on time, any delays will increase costs and delay returns and inflation in Zimbabwe is currently running over 100%/year.
For 2023 if PGM remains above $2300/oz and chrome remains around $285/tonne then I guestimate an EPS around 34 cents but if the PGM basket falls to say $2000/oz and Chrome to say $200/tonne then EPS could be nearer zero.
2024 is even more of a crystal ball job when Karo production should be underway but might not be contributing to EPS for a few more years but with great potential.
For 4) we all have our views.
Any explanation for the low valuation, profit is currently quite high and so are future estimates, what are your expectations for forward profits future prospects and current valuation, I have some eps estimates for 2022 - 23-24 of 40-41-36 cents, can anyone confirm or update these?