Member Info for Valuation-it-is

Dr A 14.24
Absolutely no offence intended, but I think the best thing I can say is to suggest you do, what you and others have advised me to do..............

And to corroborate what you find from that, why would it not be a good idea to use the contents of the Polish outfit's statement about the funding they need to raise for 10 units? A ten unit scheme is if anything likely to gain better prices than an individual unit..

Lovejoy 14.04

Thanks for the post. Not sure I can say enjoying it, but finding the debate stimulating.
What to do? Not for me to say, and I think it is probably against the rules ......However if you find it too much bother to consider what a share is worth, then as someone else said in an earlier post, it is probably best to only invest what you can afford to lose. Aim stocks are the Wild West of the stock market. Hopefully this will turn out to be a absolute corker.
Good luck to you.

Dr A 13.52 Re cost increases:- Please see the logic mentioned in the post to Keeny below, I am sorry, but otherwise DYOR ........
(DMGs seem to be 35 or 40 tonne/day units now don't they, not 25 any more. )

testpack3 13.05 At 8.05p we are looking at a very healthy and quick profit of 46% for placees, one of whom turns out to be the advisor to the polish outfit and according to Dr A is also

Lovejoy. 13.22 Glad you think it is healthy debate. Like to join the fray and answer my question to Kenny?

Kenny 12.23
Thanks for your reply. Where does that come from? ( a 35% drop? ) Are you referring to the placing price? Of course any buyer would like to buy a share for 5.5p that he can immediately sell at 9p. That perhaps explains why the share price dropped after the placing - some of the placees doing exactly that.
That is why some of us believe in pre-emption rights. It avoids small shareholders (yes like me) being stuffed. Why should anyone, now, pay 46% more than the placees?
Please consider:-
Did the directors drop the placing price to favour friends, a licensee, licensee's boyfriend, or did they set a realistic price for selling in the market so that existing shareholders would not be unduly diluted?
We all hope it was the latter. But if that is the case, how do we justify the current 46% or £100m (undiluted calculation.) premium to the director's recent valuation? The recent announcement about Poland? That does differ from the last one in November by stating they are hoping to find financing for 10 units, great news if they can do it. But to get our 46% premium and the extra £100m capitalisation, you would have to put an uncertain future £5m revenue stream on a 20 times multiple - the sort of multiple used for after tax profit streams for established up and running businesses. What else has been announced which could justify a 46% uplift or £100m? The change of strategy? I think not, It looks as if Peel want PHE to have some skin in the game and has required PHE to use some of its capital. Not good news for us.
What else has happened? The size of DMG units has risen. Unfortunately that means an increase in the cost of producing a DMG unit. This BB was working on a £5-8m cost per unit just a few months ago. It now seems that has risen. With only one site cost, the Polish units are estimated to require a spend of €132.5m in grants and a raise of some equity capital. Say it is very highly geared finance (unlikely but lets be generous), that gets us to €15m a pop again, with lower than normal site costs as 10units are expected for the one site. So that 2,000kg a day of hydrogen aunit produces suddenly has to cover almost double the financing cost. Is it these calculations that have caused Peel to be so slow? With what was being assumed on this BB just a couple of months ago, I would not have been surprised if Peel had raised £1bn and proceeded at pace with 75 DMG units around the country. But for some reason Peel appear (not known) to have asked PHE to put some of their own money in. Why? Have the economics become less attractive or uncertain? We may not find out until the first DMG has been up and running for a while.
So please put forward the positive case for buying at the current 8.05p - 46% more than the directors selling price in the placing? Why should an investor now, pay 46% more than the placees?

Yes.

Notforalongtime 1.56am
Thanks for your genuinely pleasant response. I think it is a good idea to go direct to the company and ask questions. I have done so and had quick and good responses. DR will be greatly missed when he retires.
But whether to share those revelations?
This board can be a great exchange for all if we pool our findings and thoughts. Clearly that approach does not appeal to those who are fully invested, do not want to buy more and just want a positive news flow on the BB - which in their opinion pushes the share price up. I spent a lot of time yesterday defending myself and trying to post what I consider to be useful info. Unfortunately I think it is probably a waste of time. Investing in AIM stocks is like being in the wild west of the stock market huge gains to be had and huge risks. It seems many here do not wish to discuss the risks. Fair enough - their loss.
I was struck by a comment from the extremely well informed DR A. He said he thought White and Binkowska (part owner of the Polish licence) were an item. I won't expand on that whether good or bad, just leave it hanging in the air for consideration together with previous comments observations.
Good luck all, I hope our dreams come true.

DR A
Were you referring to :-
"I really, really do not like seeing any shareholders ripped off or taken advantage of, particularly small shareholders."
when you wrote
"However, the trying to protect other investors, is somewhat patronising though, sorry to say."

There are people who do you know. I am sorry if you find that patronising. You seem to care about other people on this board and spend a lot of time helping them understand the company. I don't find that patronising. I don't find it "ramping" I just find it helpful, so thanks.

telephoneman 21.03
Please use the filter facility. Put those blinkers on, you will be happier.
as for your comment
"As Kenny say, bashers never attack a bad stock."

No bashing from me, but what do you think hedge funds spend their time doing, finding the bad stocks then what ignoring them? You clearly do not have a clue.

Kenny 20.28 (On your list of postings but strangely not shown on those below)
Thanks for your reply. I am glad you are a genuine LTH with no bias due to company links etc. You have provided a huge amount of worthwhile information to many on this board , probably thousands of posts on PHE alone and we have a lot to be grateful for as a result. Many thanks.
Your tireless work is truly exceptional. And I think you believe you are campaigning for a very good cause. I am trying to do my bit for shareholders too, especially small shareholders. Not a de-ramp, just words of caution.

Dr A 19.35
Thanks for your courteous reply. Sometimes new info makes me wary, sometimes it makes me bullish. I guess the same as everyone else. Today a couple of things came up which made me wary.
1.White as licensee (again) this time in Poland, and a beneficiary of the discounted placing see further comment below.
2. The realisation that the placing money tides the company over for about 12 months, and it is going to take that long to get Protos up and running and perhaps longer to get data from it to give to parties interested in how DMG performs. Who would put in 15million / unit without being sure of the output? Hence a risk of another fund raising.
Fair enough or obsessive? Discuss or filter out? The decision is yours.

Markrops 20.35

Thanks for your thoughts. I noted the positives at the time and below - so was seeking to be balanced.
But will the same happen again? Hopefully not. And hopefully the company will be able to stick to its strategy i.e. the licensing model.
As I wrote to Lovejoy, at present sticking to that strategy seems a difficult thing to pull off. If Protos takes a year to build, then a few months to settle down, it will be perhaps15-18 months before reliable data can be given to potential licensees. If I were a potential licensee , being asked to spend per unit €15m+ land costs and pay £500k per annum, I think I would definitely want the licensor to have some skin in the game. This is I suspect exactly what Peel concluded and why PHE have amended their strategy in the short term. And there you have the risk to the small shareholders i.e. more capital having to be raised, in 12 months time, perhaps at a discounted price, maybe a placing rather than a rights issue. Hence the need to keep the share price up. Hence my suspicion about anyone over-egging the buy case. Clearly this is a compelling story of doing good for society whilst investing with a hopefully gigantic return, But I think the above is one of the risks that go with that, and it should be aired and discussed. I will be happy if my fears come to nought.

Lovejoy22 19.28

HW is a shareholder as a result of selling Waste2Tricity (W2T), which was the UK licensee of DMG, to PHE. He now appears to be the Polish licensee. In the postings below I have considered whether he may do the same again. i.e sell the polish license, perhaps with a project ready to finance, back to PHE the licensor.
He and his family now have a 26% stake in PHE. Before the placing it was 26%, and as part of the placing the whites were offered more shares at 5.5p when the price in the market was 9p, so they were not diluted.
Therefore the Whites are in a position of considerable influence over PHEs board.
I suspect most of the rest of us posting on this board were dliuted and not offered discounted shares.

A flag of caution..

Telephoneman Today 20:04

Its "bull" is it? So we now know where you are coming from. Exhibiting a dislike of anything which in any way causes you to have to question your own investment decisions. A dislike of any questions which may protect other investors from losing their savings? You are clearly fully invested and don't want to discuss cons as well as pros. So please just filter me out. But don't blame me if you lose your shirt for not having considered what might go wrong. Keep those blinkers on, you will be happier until.........
Although it is none of your business I do and have taken the time to ask questions of the company and have had helpful replies. So there you go, I do what you do.

Lovejoy22 19.24

Thanks for your support. Dr A and Kenny are unfailingly polite and helpful so I do not want to upset them. But I do want to raise queries and notes of caution. This BB is not just for the convinced, the rampers and the fully invested, it is also for investors seeking info positive and negative, and discussion is helpful in that regard.
Re the Placing, I did try to be balanced at the time, but after consideration I did not like it. On the positive side, It has ensured that the company has finance for 12-18 months so that is good news and gives much needed time to create deal flow. It is also re-assuring that White wants to maintain his family stake even if it is at 5.5p rather than the market price of 9p, and, I suppose the share price had run up very fast and placees might have expected some profit taking so they probably wanted a margin of safety.
But even so it was far too big a discount. Will the same happen again?
It depends if PHE can stick to its strategy, of not investing in the DMG projects. At present that seems a difficult thing to pull off. If Protos takes a year to build, then a few months to settle down, it will be perhaps15-18 months before reliable data can be given to potential licensees. If I were a potential licensee , being asked to spend per unit €15m+ land costs and pay £500k per annum, I think I would definitely want the licensor to have some skin in the game. This is I suspect exactly what Peel concluded and why PHE have amended their strategy in the short term. And there you have the risk to the small shareholders i.e. more capital having to be raised, perhaps at a discounted price, maybe a placing rather than a rights issue. Hence the need to keep the share price up. Hence my suspicion about anyone over-egging the buy case.
Lots of sharks in the waters.......... But come on in its really warm....

Bit below the belt Kenny, but 5.5p would have been nice, like all those other people favoured by the board and their brokers.
Were you one? Were you offered shares at 5.5p?
.........Please see my reply to Dr A, then you may understand. I hope you are a genuine LTH too.

Dr A Today 18:34
Thanks for your query. I am trying to get comfortable with the share again, after having had my confidence and perhaps over-enthusiasm shot to bits by the heavily discounted placing. Given hydrogen shares were and are buzzing, given the amount of capital sought was a small percentage of the market cap, I thought it was outrageous that shares were sold at 5.5p to anyone but us, OK Mr White got some who is a licenssee, but not small shareholders.So not all shareholders are treated the same. It was a handout of cheap shares to a connected party. Not pleasant. 5.5p compared to the price in the market of 9p if I remember correctly. There was no need to discount the issue price so much, and it smelled really bad to me.
I really, really do not like seeing any shareholders ripped off or taken advantage of, particularly small shareholders.
So forgive me if it seems like I am playing devil's advocate, but if the story is good - and this one seems to be on several levels, then the queries should be able to be countered with ease. If not, then a word of caution will have gone out, which may prevent some people either losing their shirt, their pension, their saving, and confidence in their investing abilities.

So I have leveled with you, perhaps you and Kenny can say if you have any connections with the company, whether you are employed to provide info to shareholders by the company etc. It too is a genuine question and I expect the answer is,
No you only are LTHs eager to see a really useful business succeed. I hope so.

Kenny 18.29
I think it is a cut and paste from HUI .. "As a result its highly likely that the Project will be able to secure customers from most of western Poland, and not only the area closest to Konin"

I read customers as being providers of plastic waste rather than buyers of DMG units. Did you think the latter?

Kenny 18.09
Would PHE get the £1m, or would it get £500k with the other £500k being kept by the country licensee? If either, it would make the deal more expensive for the third party.