For reference, 1.3c places market cap at $16.7m. $3.2m Cash in bank. Meaning that the enterprise value of ECS is $13.5m.
Breaking it down from the HY results, current assets say at $9.73m for Land, Buildings, Farm assets, equipment. This does not include the inventory, which going by historical estimates could sit in the realm of $7m-8m or higher based on the substantial increase in harvested product.
* Net assets at last FY was $26.1m increasing to $30.5m at the expect this to have increased again with facility expansions), so 1.3c would trade at a price-to-book of 0.54 - 0.63.
On this basis alone, ECS is trading at a substantial discount to asset valuation.
Who knows why the share price has tanked, but I can be certain that ECS has long term contracts in place as well as $20m in expected ARR. Value is here to be had for those with enough gusto to take the leap. Historical data means nothing, but from 28/6/22 to 8/7/22 the SP rose from ATLs at 1.4c to 2.8c. ECS has had multiple catalysts along the way, which all seem to be ignored in their strengthening of SP. Swings can happen exceptionally fast in the micro-cap space. And for every large parcel sold into, someone else is absorbing those shares. Given the lack of buying into and forcing the SP up, there are inevitably going to be players sitting back and accumulating at these levels. I’ll be happy if my 1.4c gets sold into after this mornings dip as IMO it is phenomenal value.
Note that RAP Green Gelato Vape and RAP Pineapple Express flower has listed on CannaReviews. So the B2C pathway is well and truly in play now, hopefully get to see this capitalise over the coming reporting periods.
ECS Price at posting:
1.4¢ Sentiment: Buy Disclosure: Held
