Member Info for Nickthesaint11

I'm getting c. $200m at current Fluorspar prices

Don't worry folks, a lottery is coming your way soon:

https://www.bloomberg.com/news/articles/2025-09-21/chinese-savers-have-23-trillion-and-few-options-beyond-stocks?utm_source=substack&utm_medium=email

The recent sell off has made this a doozy of a buy here:

1. Strengthening / stable Egyptian Pound - so inflation risks deteriorating

2. Simple business - diagnostics. Saves people having to fly out to Asian destinations for medical tourism

3. Strong moat - no serious competitors. Meanwhile becoming more entrenched with its Hub, Spoke, Spike model

4. Upside as it rolls out into Saudi Arabia and Nigeria

DYOR but this seems like a nice entry point in fast-growing markets for a simple, cash generative Buffett like business

The Brokers have materially undervalued IIG (or at least HUI10) on a DCF even with the upsides they are giving here:

Zeus: 5.1x from here

Progressive 8.9x from here

Zeus, for example, have erroneously stated UK Lottery usage is 30%. This is only for the National Lottery, not including all the others inc. Thunderball Lotto etc. Add these in and you get 50% adult players - a very big difference. Given that China has only two national lotteries and HUI10 has the sole rights to digitise both of these, Zeus should really use this number as its benchmark for the TAM.

But that's if you believe the UK, versus say other countries in the Chinese diaspora (eg HK and Singapore) are the best analogues for estimating TAM.

Were you to take the view that HK and Singapore are better analogues, then you would get a TAM of 67% for HK and 70% for Singapore. Now that 'pretty big difference' expands to a huge difference.

But OK I have used the 50% number in my DCF (which is the same also for US lottery adult player engagement). So add on another 20% of the 1.1bn Chinese adults to the TAM. Then we come to the next gap in valuation - namely terminal date.

The brokers stop at 2029, and while even here the number spiral upwards, it's nothing compared to what you get were you to take your DCF numbers to 2035, where maturity is reached (bear in mind also that HUI10's patent is good until 2037) and scale is achieved.

The numbers now become simply outlandish. At stable state, revenue is printing at $81bn with a net profit of $48bn. This is the beauty of a capex-lite business with a monopoly (ie no competitors to disrupt) and a flywheel effect as it gets other commercial entities onboarded into its ecosystem and the ecosystem (not just the 'digital transformation of China's lottery') becomes the core value driver for the business. The ecosystem takes on a life of its own.

But to get these numbers you need to take a view to 2035 and be realistic also of the engagement among adults, which I don't think Zeus have been. If we apply the numbers from a DCF like this, we are not talking of a 10x or even a 100x from here, but over 1000x and in effect a business that sits alongside Tencent and other megacaps in the Chinese market.

Ofc the problem then becomes one of getting the cashflows from HUI10 into IIG, which I don't think will be easy.

That said one doesn't need to worry for a 2035 home run. First base here will serve shareholders very well indeed, assuming the company can execute effectively. It's also hard to see how Chinese state support will wane given that China probably doesn't like the look of other neighbouring countries running digital lotteries, and it being left behind in this regard, inc the missed revenue opportunities for itself.

Imo we've been spoilt by management in a way by its very good execution in 2025.

Apart from the SPAC, it delivered pretty much everything it planned to do last year. We could go further and say the market still hasn't cottoned on / caught up with this.

MKA is trading significantly below FV (by many multiples) on a DCF, assuming it will broadly execute on its plan going forward on a multi-year basis. Myles' numbers are broadly correct.

The short loop technology is proving to be world class and a moat, while the REE problem is not going to go away.

"The stock market is a device for transferring money from the impatient to the patient," Buffett

I bought last month but didn't get enough of a holding.

Analysis I did using AI identified a strong probability of eps beats in 26 and 27, same as it did with ASA International, Tekmar and IDHC.

None of these are covered by mainstream smallcap publications and even when I banged the drum on them they were dismissed (notable exception is Oak Bloke who can see value when it's there, kudos to him).

But I'm sorry to say that most of the other pundits are out to lunch.

Good news is that when a share is under owned (like Hardide) it absolutely explodes.

Anyway happy with my 10% pm portfolio compounding growth rate. Happy Christmas all :-)

I wonder if there might be a takeover on the horizon?

I read up about the company extensively then bought in in June at c. 36 cents.

Bottom line on this is look at the growth in the countries IDHC is operating in. Look at the margins, which then asks, does the company have a decent moat? Yes it does. For a simple business in healthcare.

Yet whenever I floated the idea everyone came back at me with negativity, including on a well-known smallcaps group. Risky, dangerous they said. Then look at the cr** they invest in.

No, it's stocks dependent on UK cashflows that are risky,

I also have a large position in ASA International - another one all the experts constantly slag off. Again, look at the moat, look ar Director buying and skin in the game (same as with IDHC). Look at the growth in the markets they operate in.

Buy these two companies and sell UK cr**, and you'll do just fine.

Another double over the next year for both, easy money.

Europe's REE supply chain is beholden to others...

https://x.com/WizardofWindsor/status/1983432132149334191?s=19

I now have €93m net profit printing for 2026.

NPV on my dcf model pointing at 7x to fair value at $3600 gold

Super set of results, what more can be said?

These shares are crazily undervalued. Cavendish have reset their target today to £2.75, but even that is set too low imo

I bought some more myself today.

Non exec buying £290k's worth says something.

It's not a sell imo. But investors must make their own evaluations and choices.

Results next week ;-)

ASA is seriously undervalued. Would not be surprised if this is above £2 post results

Lol. PXEN cheap as chips.

This deal is to supply gas at over 4x Henry Hub.

Nice margins.

Yes and for what is attributable to MKA wooden, i.e. not COTEC. To the other comment on the thread, I am not including any further sites, licences or JVs in the calculation. Or the possibility that MKA can further advance to a capital lite model. So simply a DCF for what we already have in place for 2028 numbers.

Also not considered is the optionality of the other exploration licences in Malawi. This gives MKA a protective aspect, in that say suddenly competition emerges in the downstream business, MKA can pivot back to upstream.

I have Fair Value over £600m

Recycling Operations 2028 (UK, Ger, US, Jpn) - £229m

Songwe Hill - £382m

Other Malawi licences, say £3m each - £9m

Good write up by The Oak Bloke:

https://theoakbloke.substack.com/p/arrrrr-it-as-a-eye-you-see

Peter Tesla seems to fit the bill perfectly for you. P/E of 183 plus a clearly weakening momentum, massively hyped too.

So I take it you'll be shorting then?