2017 - A KPO story, page-125

One of the most important things which I have come across with KPO is as follows:

See the table below well those figures are what dreams are made of, absolutely eye watering and guess what, they are expected to be the bare minimum. From my recent enquires we should be expecting significantly more projects then those projected below in the financial modelling. The table was at the time of release managements honest opinion based on negotiation progress with clients however due to ASX forward looking rules were told to drop it from publication. I am now very confident most of the 2 years of enquires put on hold due to management changes are at various stages of negotiation with a good proportion of them all being hammered out within close proximity in H1 this year agreement wise.

Remember the below table is ONLY based of 0.001% of the entire waste heat market in which low heat sources is exclusively for Kalina cycle (with no credible opposition) and makes up 65% of the entire heat market. This is insane and you can quickly see how this will become a multibillion dollar company without breaking a sweat.

Based on a high growth defensive utility PE ratio of 30 and remembering the PE will be built into the company well before the builds and will be the upon signing the agreements which will be happening mostly in H1 2017 for the plants over the next 3 years of financial modelling.

Based on this I give a 6-month target price on KPO of $1.10-$1.20 Base case and $2.50-$2.70 optimistic case assuming more than the model indicates comes in which is very likely IMO. Yes, I’m not joking these solid utilities stocks that are successes deliver hardcore gains.

There is a very big reason why 40 high level meetings were conducted with institutions in November and December followed by the shares in which management were gifted in the form of 5 cent options to give them one hell of an incentive to follow through which they had already set up now to pull the trigger.

In the words of management “the response was phenomenal”

Capital light high margin and fully funded all the way just lovely.

See you all at the other side of the tunnel not long now at all I believe let the TA do what it wants in the coming days because it won’t matter a damn.


A picture explains a thousand words...... see you all on the other side cheerio