China carbonate price going up, page-93

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19/11/18

18:33

Post #: 36561570
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Originally posted by asb83: ↑

No worries - My $2 fair value estimate is based on medium-term foreseeable earnings with a discount because of the risk associated with the price of the commodity the company derives its income from, along with a reduced valuation of assets that are not producing any income.

Mt C is making about A$70m annualised EBITDA based on the most recent quarterly. An EBITDA ratio of around 5 is appropriate, so A$350m.

I value SDV at A$400m. Granted the current valuation of SDV may be quite higher than this, however, the company is not looking to sell it any time soon, so you can't just value a company based on the sum of its underlying assets. If the company was looking to liquidate the asset tomorrow, then fair enough, you could justify the company being valued higher. But it isn't looking to sell it any time soon.

The rest of the valuation is based on JB, which I value as negligible as it has a long way to go before it produces any income, if ever, and you'd struggle to sell it given it is still largely a concept on paper.

Cash in the bank doesn't come into play with the current valuation of the company as the majority of this money is earmarked to be used building its existing assets. So in 3-5 years' time that cash won't exist - so why use it in current valuation?

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I'm not going to comment further but your "valuation" analysis is completely flawed....."you can't value cash because it might disappear" - come on fair go, that says it all - sorry.

GXY Price at posting: $2.64 Sentiment: Buy Disclosure: Held
11 Upvote

2 Great analysis

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