valuation, page-51

All,

I posted my updated (basic) valuation on hotmail that includes the carried forward tax losses & CS revenue.

Lots of thanks to Lekki and Tweks for their help with this one.

website: www.hotmail.com
user: [email protected]
pw: austpac01

I don't have the technical skills to post it here, if someone can do this, thats fine by me.

Notes:
* Unfortunately the carried forward tax losses doesn't make too much of an impact, because APG will be making too much money ;-) for it too reduce its tax liability by too much

* CS does have a reasonable impact on the share price that isn't adjusted for probability;11-14c (See the worksheet 'CS revenue for the related assumptions). The reason this isn't higher is because the cashflows are quite a long way out, so in todays terms it is not that much money.

* There is little change in the probability adjusted price because I have put in the CS revenue at 10% probability of being realized. Changing this figure (cell C141 on worksheet 'Valuation') or the % License fee APG gets (cell C17 on worksheet 'CS Revenue') has a significant impact on the share prices- so you might like to do some scenarios yourself.

Again, shout if there are some blatant errors or you have any questions.

All up, I still rate APG a buy, with fair value at the moment somewhere between 19c & 23c (the 25 yr & pepetuity, probability adjusted valuations). There is plenty of upside from this as testing progresses.

If after further testing, BHP & Onestell are happy with the technology and BHP want to take us over, I reckon 55c would be a reasonable price (46c + ~20%).

However, as Lekki says, in 12 months time we'll really know where we stand - it'll be tears or beers time then.

Rgds,
FG