Adaman Resourses, page-16

Morgans 2/3/21 when share price was 41 cps.

Sell-off looks overdone
Our valuation/target reduces to $0.72ps (from $0.91) with delayed net debt reduction and
as we apply a slightly higher multiple to our multiples based valuation. The SMS dispute
rightfully raises questions on MSV’s client risk management, but equally highlights the
inherent challenges of contracting, explaining how many smaller mining services often
trade at discounts to larger peers. The impairment does delay MSV’s de-gearing, but we
forecast MSV to accelerate toward a net cash position by 2HCY22, with likely capital
management set to attract renewed interest ahead of that catalyst in our view. SMS is a
blot on MSV’s ledger, but the sell-off looks overdone here with MSV trading on ~2.6x
FY22F EV/EBITDA