Ann: FNP Appendix 3Y Change in Directors Interests P Gunner, page-4

not sure where the bottom lies here because fnp is not really a traders stock and has such a narrow free float so technical analysis is a little unreliable here i suspect.

i think what is happening is that ppt is continuing to sell down their holding which still sits at around 7.6% or something along those lines. this is driving the sell volume and the bearish momentum is probably exacerbating things by triggering profit taking from some who bought below 4.00 and some stop losses too for those who bought at fundraising price of 4.45 or above.

the broadbased buying by so many directors on market looks like a pretty strong buy signal.

i am tempted to top up with the sp now just below my average purchase price but will sit tight and hope for 3.80ish. nothing magical technically about that number so ill watch the price and volume and look for selling to dry up.

the good news is that the recent announcement of selling land and leasing back for 75mill cash means that a capital raise is off the table.

projected sales of 350mill at 40% yoy growth is solid for a company with a market cap of 800 mill, although the operating ebitda margin was fairly low at around 9-10% for 2016 (25 mill on 260mill in sales).

the company is guiding for expanding ebitda margins due to a combination of less capex and high margin product expansions plus cost efficiencies, so say they achieve a small improvement in ebitda margin to 13%, that would mean 45mill ebitda for fy 2018, which is close to 100% ebitda growth.

the best bit is that they are expecting full realisation of the benefits of previous manufacturing capex, acquisitions and joint ventures to flow through in fy 2019 so i suspect then ebitda could easily hit 100mill.

therefore, although the company currently looks expensive in terms of price to sales, ebitda and earnings relative to its sector and has a heavy debt load at 50% debt/ equity, it has a huge growth runway over the next 3-5 years and i expect the company will be re rated in 12 months once they deliver a fantastic set of fy18 numbers in terms of yoy growth and once they give their fy19 guidance which i expect will be for further massive sales and ebitda growth.

i dont think the market has cottoned on to this yet, so anything under $4 will look like a great entry price. i dont see any short term catalyst for a big rise so i would wait for selling to dry up then accumulate small packages on dips.