Viney mentioned recently that I did some amateur valuations on BTU around last November and happily I still think they apply. I would appreciate any other views.
I value BTU as follows
Im working on 2 mtpa production as it is about mid range of their long term forecast.
2mtpa at $200 tonne profit = $400,000000 pa subtract tax of approx $100,000000 gives us a Net profit of $300 million pa. On a conservative pe of 7 , BTU would be valued at $2.1 billion. With less than 700 million shares ( maybe a few more fully diluted ) it should be worth around $3 per share.
Very simple I know but in my view the only variable is the price of coaking coal which we can only estimate.
I feel any take over offer would have to be around this figure to get Hamish interested, and of course would only come after approvals are granted.
Viney I read the negative article you found in NZ and while it was concerning I read between the lines that the residents were resigned to the approval and were fighting to get the best terms possible. Did you see that or am I looking through rose coloured glasses and self interest? Viney Id also like to thank you for your great coverage and research on BTU its always informative and balanced and congratulate you on riding BTU into the ASX 200 from the beginning.
Would appreciate any other views on valuation or approval chances. Hearing starts tomorrow.
good luck
gmc
BTU Price at posting:
$1.21 Sentiment: LT Buy Disclosure: Held
