Okay, thanks for that. It clarifies. The point made is "EXPECTED supply vs demand" (forgive the caps - only way to emphasise). One cannot just look at the graph and see the bar increasing, one has to ask was the rate of change higher or lower than "expected". However, that conjures up a whole new dimension of uncertainty: what is the expected increase? (assuming an increase) and whose expectations? And where to find that data? Be interesting to look at the monthly chart and map it onto the monthly sales. Have you done this and is there a correlation? I know that is not proof. There is no such thing. But it would be significant.
Maybe I`m just being dumb as f here. ...(would not be the 1st time) If car sales are UP in China well that means more cars are being produced /sold = more materials needed (obvs) = one of the key materials is ...PGMs. If it were the reverse, I`d be worried. ... If I`m selling bananas and nobody is coming to my stall to buy them, I aint gonna be placing orders at the banana factory, who in turn ain`t gonna be placing orders at the banana plantation. What am I missing ???!!!
Nothing wrong with crude! (no pun intended) KISS. The simpler the better. All the fancy DCF or NPV in the world mean diddly if one of the assumptions is wrong. I will go with your logic cada dia y dobles los Dominges :) GLA
Rift is right - see page 92 of the Admission Document:
Conversion of Founders Plan awards into Nil Cost Options 22.214.171.124 On each of 16 March 2024, 16 March 2025 and 16 March 2026 (the “First”, “Second” and “Third Measurement Dates” respectively, and each a “Measurement Date”), Founders Plan Awards will convert into Nil Cost Options over Ordinary Shares. The number of Ordinary Shares under any Nil Cost Option into which a Founders Plan Awards will convert will be determined by the Remuneration Committee on the following basis:
I note that although KIST have FCF of 66.4m the operating cash flows of 34.8m were not sufficient to avoid a loss for y/e 2021, the bulk of the FCF coming through financing activities (debt and equity in other words) On today`s call, Paul M talked pointedly about FCF and using that as the yardstick for valuation. I agree. Revenue is vanity, profit is sanity, but cash is reality.
If you ONLY run the FCF of 36m over the next 5 years alone assuming no growth at all and discount back at 15% = 85p. Even that is conservative. It is so typical how crappy start-ups with zero hope are doing down rounds at massive projected valuations (cue bankers fees) and this little beauty is valued at a quarter of a quid lol. GLA
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!
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
FY net profit of 40% is pretty heady, unbelievable really. [$60m net against FY sales of 146.2m] I think Bang is taking gross basket price of $2,589. X production of 18,837 oz to give a gross basket revenue of $48.7m against reported 6E rev of $37.6m (being 77%). The inverse of that - 23% - gives a net basket of $1,994. At least that number is pretty near $1,804. Broker estimate of FY sales of $166m looks a bit high.