Target $18.72, page-10234

Thanks Alex, it good to hear some from the non fanboy side.

That being said i’m a little more bullish:
Bull Case

• FY24 equity tonnes sold was 19.5m. my estimate for FY25 is 25m equity tonnes sold.
• FY24 underlying EBITDA was $1400m. At same coal prices as this year my estimate is $2,300m for FY25. if they were allowed to include QLD in dividends this would translate to a total of 10.7% dividend yield at $7 share price.
• High costs for Blackwater likely to come down from $145 FOB to $129.
• When does the 30% selldown come into effect? Will WHC get 100% of blackwater for the first 9 months? If so it will make FY25 numbers quite good.
• There are several projects including: Narrabri Stage 3 Extension, Vickery, Winchester South not completely factored in.
• There appears to me of a turning in attitude for ESG regarding Energy and Steel.
• Institutions are slowly coming back on board.

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Bear Case

• There has been a slump in Coking Coal Price. If this continues this could have significant impact on WHC’s ability to pay back its debt - 1) this could be because of new laws regarding Rebar in china set to be introduced on 25 Sep. we could se a recovery in the months after this. 2) if the price stays at current prices WHC will not have to pay back at least the 1st year of contingency.
• China has not stimulated like people thought. This could cause coal prices to go back to what they used to be! - 1) WHC’s position on the cost curve could protect them over time. Debt due, is due in future which can help them survive till then. 2) This is true prices are way above historical but inflation has had a large impact, both sale price AND costs.
• Price can go down for sure but just how far.Demand Forecasts are Made Up! - 1) I think it is too, I also think WHC picks the best demand forecast for its purposes. I do though think we are definitely in an age of electrification and there will be large demand for steel and energy across Asia.
• US Dollar is estimated to come down this will greatly impact realised price for Coal - 1) This is true though the debt is in USD as well. Initial calculations indicate this will greatly offset a strengthening in AUD.