news in about 6 fires burning 2 out of control but importantly one in radiata pine kpt plantation
i expect extension to TH tomorrow the big issues are multifold a) the insurance coverage is not clear but the premium is very high so high that the last fire of dec 2018 burning only 1.75pct of plantation and under assessed damage valuation at $2.5 mill didnt warrant a claim due to excess requirement! b) strangely it seems the market has undervalued the fire risk of loss vs the enterprise value of long growing trees c) the stock is very illiquid and trades very lightly with big gaps in last traded prices on bid or offer and the spread of shareholders is dominated by large related principals involved in the business or associated d) clearly the potential for a large value move down is here right now d) especially as the project is still awaiting enviro impact statement approval after agreed adjustments to the project plan are still being implemented for re consideration - timelines for production are still blowing out f) the previously built wharf from vietnam has or is being modified and the now floating wharf jetty from the previos static wharf is being modified to extend much further out to sea elevating weather related risk to its stability g) the cba $50 mill credit line for wharf and jetty mostly drawn and hence the last cap raise to meet new unexpected cost overruns
altogether not a good picture on many fronts
i expect a big correction after TH lifted irregardless of soothing words from the company re potential fire damage currently being experienced i asked myself and a fellow close investor in kpt if we should take advantage of any “ percieved excessive pull back in price to say 1$ “ he said no way i cant sell into that illiquidity anyway in any volume and i wouldnt be able to assess where real value now actually lies with so many uncertainties
i am more than worried im locked in here comments to assuage my fears ?
KPT Price at posting:
$2.35 Sentiment: Hold Disclosure: Held
