Hey Phantom,
Just had another read of the corporate presentation for the capital raising.
I should have been more brutal with the cash position, as I did not realise the raising costs were so high, plus, they had to pay back a small loan to the VIC government. So likely trading at an E/V of around $115-120m.
Investment of $72m over the near term means around $40m cash buffer, which, as I mentioned, is very good buffer, if.... issues like Chip shortages reduce. But, risks are there.
As for how much revenue/profit is required to justify the current market cap, in these markets.... business that never make a profit, after a decade, still have market caps in the U.S in the billions (10's, 100s....)
CBR is hopefully, as they have explained, going to be profitable near years end, then, the question will be easier to answer.
$20m, is as good a number as any though. The company plans to have margins of 600-800 per wheel, so they need to sell 28.5k wheels to achieve that. Right now, I believe they are selling approx 1/2 that on a yearly basis (though I think it would have been more, if the chip issues had not occurred). Production is supposed to increase, as more OEMs sign up and order etc. If they do so, then, I guess my investment will have been a wise one, if not... hmm..
Hope that helps a little. Hopefully later this year, more OEMs sign up and then the pathway to higher sales becomes locked in.
Expand
