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Ann: Quarterly Report - September 2018, page-221

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Fangk

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19/10/18

11:19

Post #: 36185250
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Originally posted by ajlock: ↑

I struggle to see how this is particularly bad news. Short term loss of productivity is unfortunate and equivalent to a cash loss of $8-10m USD. But, extrapolating current results to years end (conservatively): 160dmt at an average margin of $470USD is $75m profit. On our current market cap of $674m USD thats a P/E of 9 from current operations. Considering GXYs soon cash balance of $320m, that would leave an enterprise value of $354m, and a P/E of 4.7. That is for reasonably low risk, proven (although finite) revenue, and does not take into account SV, JB, or MC upgrade value. The report also adds certainty to the SV JV, more certainty = less risk = more value. My understaing is that by traditional metrics, GXY is undervalued, with the difference due to uncertainty and risk in future lithium markets - probably why such a large portion of the report was focussed on (positive) market outlook. I believe the key to medium term SP increase is reduction in future uncertainty, for which this report makes a significant contribution.

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Very reasonable analysis. Do you know why Q3 had lower production, sales and margin? Cheers

GXY Price at posting: $2.28 Sentiment: None Disclosure: Not Held
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0 Great analysis

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