For anyone that's interested, I posted on FinTwit some updated valuations for Genex. I am still very wary of Management's willingness to develop their pipeline further without sufficient access to the capital markets - and if they do that, well then they will need to do more cap raises at even lower prices, diluting us shareholders further.
However, some of the recent acquisitions also shine a light on the discount the market is applying to Genex's assets. When I did some rought estimates on the CWP/Origin potential bid, it worked out to be around a ~30% discount for Genex's assets on a weighted basis.
| | MW | % of Port | Value | MW | % of Port | Value |
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| 1 | Solar/Wind (Operating) | 404 | 22% | $1,313 | 100 | 12% | $325 |
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| 2 | Battery (Operating) | 0 | 0% | $- | 0 | 0% | $- |
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| 3 | In Construction | 244 | 13% | $610 | 300 | 37% | $750 |
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| 4 | In Development | 624 | 34% | $1,248 | 150 | 18% | $300 |
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| 5 | Feasibility (pre FID) | 550 | 30% | $831 | 270 | 33% | $408 |
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| 6 | Total | 1822 | 100% | $4,000 | 820 | 100% | $1,783 |
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| 8 | Genex EV (26f) | $1,175 |
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| 9 | Genex Valuation (CWP) | $1,783 |
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| 10 | Discount | 34% |
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My guess is that the market is pricing Genex as a bond proxy. But, I think the market is being overly harsh - and specifically not adjusting for the inflation protection that the EA agreement on the pumped hydro has. If I use an inflation-protected bond rate and a 2% equity premium, then I think the value of the pumped hydro system is around $1bn alone. Note that on a $1.175bn enterprise value in FY26f, that means the rest of the pipeline and assets are only being valued at $175m today - way below the fair price.
I've shifted my sentiment to a buy - not because I think management can't stuff this up, but the discount is probably a fair risk-reward that management might stuff it up! Besides, the market last week really just took the interest rate hike in it's stride, and that's the biggest risk to valuation for Genex right now. So at least that's one less thing to worry about perhaps. GLTAH.
