We’ve never received as much information as can be found in the presentation above, which is both great, but also disappointing that management have held this info back until they had to take this SPAC merger deal. Maybe with some of this disclosed earlier, the ASX investors (retail and institutional) would have thrown more capital behind CBR and some of the current challenges could have been avoided!!
Anyway the big takeouts from the presentation for me were: - $50.3m in revenue projected for 2023 calendar year, with 98% of that being awarded revenue - $90.1m in revenue projected for 2024 CY, with 76% awarded and 22% in engineering. - 45k wheels is current EBITDA breakeven projection, with 49k projected in 2024. As volumes increase and production heads to low cost jurisdictions like Mexico and Thailand (ARB manufacture there), the profit margins per wheel will be extremely attractive!! - The finally, they drop this chestnut, that by 2027E ~5.0x current volumes are projected from platforms that are either awarded or in engineering today
You can spend all day trying to speculate on the next vehicle CBR wheels roll out on and I understand the appeal here, but you don’t really have to, its exceptionally rare to be the product of choice specified by OEM’s like Ferrari, GM, Ford, etc for their top end signature vehicles with basically no competition (massive moat!!!), which in turn gives exceptional visibility into CBR’s future revenue potential (when management bother disclosing relevant info) based only on the current deals awarded, or in engineering.
There are also plenty of vehicles we must be discussing with OEM’s which aren’t awarded or engineering, then there’s the after market sales and other development’s like helicopter wheels, etc.
The next 6 months could be bumpy, but a smart investor will look at ARB and PWH and understand that with some short term bridge funding, there is the potential for a HUGE payback in the short term, before a ginormous return that could be available if they hold this with a 5 year time horizon (2027 when volumes are 5x) when international production is hitting its straps!!
CBR Price at posting:
10.0¢ Sentiment: None Disclosure: Not Held
