AEI Valuation Discussion, page-4

Not sure about some of the assumptions above. Revenue estimates are way too high IMO. On my watch list and I’ve built a fairly thorough model as the business interests me. I get a blended valuation in the mid 60s using a 50% PE and 50% DCF on FY21 numbers. The key to the business is whether it truly is scalable and whether they can maintain fixed costs. If you go back to previous announcements the fixed cost figure they’ve quoted has increased - not by a huge amount but if you’re saying $7m forever you’re basically saying no one in the company will ever get a pay rise and other costs won’t increase. You need to allow for some inflation plus don’t forget the costs from the equity raise which will be realised in Q4. Anyway sophs are selling and this is falling in a rising and over valued market. What’s going to happen to the SP when the market actually falls? A better entry should make the economics of this more appealing soon.