You keep stating 50% net profit growth and PE 30 can be justified.
First of all, most of the profit growth number is not sustainable. They are mainly from acquisitions. All three acquisitions are recorded into BWX account on or after July 2017. In fact, 1H18 result shows that Sukin’s growth is only 16%. It is questionable whether BWX will have 20% profit growth next year.
Secondly, the forward PE should be lower than 30. According to 1H18, normalised EBITDA to NPAT ratio is 61%. Assuming EBITDA is $41m, NPAT is expected to be $25m for 2018 whole year. BWX has a market cap of $600m. Forward PE should be 24.
Next year profit growth is expected to be lower than 20%. Forward PE is 24.
I have no opinion on whether the share is over or under valued. I am an ex-holder who is interested in how things go.
BWX Price at posting:
$4.94 Sentiment: None Disclosure: Not Held
