IMO, the low valuation has nothing to do with the excellent...

IMO, the low valuation has nothing to do with the excellent fundamentals of these companies but all to do with the perceived "sovereign risk" of some South Pacific nations. In the last few years, it appears to me that the market is applying a 6x PE multiple to companies in the region without discriminating for fundamentals. I think this is incorrect but obviously I'm in the minority. Who is right about the sovereign risk factor can only be confirmed in hindsight. Prior to the Russia-Ukraine war, many Russian companies were also dirt cheap trading on PE multiples of 3x and in hindsight was massively overpriced for Western investors.

In my modelling, I assume my exit multiple to be 6x with the returns mostly coming from growth in profit. I do not assume a PE multiple expansion. Most unfortunately, by many measures of development PNG is still a basket-case.