For those optimists, things you need to know are as follows.
1. The herd is rebuiling, this factor has already taken into cattle industry report. If you have not got one, I suggest you download from the below website and read it through. But even with rebuilding, the expected cattle export number is still siganifcant less than 2014 CY and 2015 CY.
http://www.mla.com.au/prices-markets/Trends-analysis/cattle-projections/
2. 2015 CY is the highest number of cattle they have shipped in the past 5 years, also would be shipped for the coming 5 years. But the highest sales volume was offset by the higher beef price. So the profit is even lower.
3. Check the cattle report, the expected export cattles in 2021 CY is some what between 2013 CY and 2014 CY. we assume that the number they would ship in 2021 FY is the same as 2014 FY. Check the prospetus, in 2014 FY, the pro-forma statements which is prepared assuming perfect condition, without any noise, without any operational error, it is only 19m. In other words, WLD is targeting to achieve 19m profit in 5 years time and based on the condition that the margin could remain the same as 2014 FY. Is it possible?
4. There is no addtional cattle to ship. The extra shipping capability can only be rent on charter, like Shearer is doing right now. I would not able to tell if the charter incom is enough to cover their interest, depreciation and repair and maintenace.
5. Don't believe Morgan's target price. When it was listed at 1.39, Morgan said the target price was more than $1.60 in last Dec. It is one of the reasons that I jumped into this share in IPO. I have totally written off my more than $170K IPO investments for this share in my heart now in even not in paper. No hope.
