I share different view with your valuation/ calculation.
A2M Group operating ebitda forecast to be around $35 mil but if you break this number down further, u will see the ANZ and china region Ebitda actually forecast to be around $55 mil, which give the current valuation of only around 20 pe. As explained previously, in my opinion, when we value a2m we shouldnt take other region into consideration because they are still in infant stage. If the result for these region come out good, it is an extra; if it is not, the management can always adjust the strategy to either pull the plug or reduce the expenses accordingly.
Lets put it this way,
Bal ebitda current forecast $19 mil half year x2= $38mil per year.
If Bal want to expand to other regions, Bal need to spend to expand. That means the group ebitda will be less than $38mil. If we use the same expenditure figure as a2m forecast to be $20 mil, the group ebitda will end up to be only around $18mil only.
While for A2M current forecast for ANZ and china region is around $55 mil and expenditure to other region forecast to be $20 therefore the group ebitda is $35.
Both stocks' current market cap value is around $1.1 to 1.2 bil so which stock do u think has more value? And how much upside does a2m has?
A2M Price at posting:
$1.67 Sentiment: Buy Disclosure: Held
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