Whittpa Are you still holding? I like your long term view and...

First 5 Last

Share
Profile

Follow
Few Pennies

880 Posts.

319

26/08/17

16:22

Post #: 26780640
Share

Originally posted by whittpa ↑

G'day
I did quite a bit of research the other day & ran some numbers;
There are 500k OA sufferers in NZ, 2.1mio in Oz and 30mio in USA. I checked out that average cost in USA is $4k pa, of which ~$1400 is on actual medicine. Anyway our product is only $96 for 3months supply, so $400 pa. So if over time we ONLY get 5% penetration in NZ, OZ & USA, then that's 32.6million people x5% is 1.63million users at $400 pa is NSD$652 million sales pa, at 70% gross profit margin, so GP $456million, less say 20% operating costs, so NPBT $364.8mio, less 28% corp tax, so NPAT $262mio. This ignores the fact that USA sales will be worth 1.5x NZ sales as they'll be USD$400 pa (& I expect price rises over time), also ignores pet sales.
So on a 15x PE multiple, equates to a market capitalisation of $3.939billion on current share count of say 500mio shares (currently ~499mio, don't expect any more cap raises as they should be profitable by FYE 31.12.2017, just depends on how much they spend on R&D, although Callaghan funding 40% of that. As soon as profitable a bank will fund part of the working capital cycle, funding trade receivables with trade finance). Anyway back to share price on the above numbers it would be $7.88. Incidentally I expect way more market penetration than 5% as time passes. This is a lifetime hold share, obviously a risk is a one product company, but with the diversification into pet category could argue that it's two even though product is based on the same thing. The market will eventually wake up. I've only bought 250,000 shares but reckon that is plenty for the price they'll be in 20-30 years. As I free up cash from other investments over time, I'll probably increase that to 1mio shares, even at 15 cents it's a bargain if you have a long term view & ignore market fluctuations.

Expand

Whittpa
Are you still holding?
I like your long term view and your numbers,
unlike you I only have 145000 shares
The product could (might) also easily get more momentum though partnerships.
al the best with your holdings

Price at posting: 3.2¢ Sentiment: Hold Disclosure: Held
Upvote

0 Great analysis

Reply