It is difficult to value ATP as we know that these market conditions are probably quite exceptional. Anyway, according to my estimates, they could have a net cash position of around 30 m AUD at the end of FY 24, which corresponds more or less to its enterprise value now. So this valuation corresponds to no free cash flow from next year, which is probably too cautious.
Main assumptions I use to get to this estimate of 30 m AUD net cash at the end of FY 24 : . number of pearls sold : 540,000* vs 583,000 in FY 23 and 568,000 in FY 22 . average price per pearl : 100 AUD vs 45 AUD in FY 23 and 36 AUD in FY 22 . increase of 5 % for COGS/pearl vs H2 23, . increase of 6 % for SGA, . Capex of 4.2 m AUD, vs 2.2 m in FY 23.
* 2023 harvest exceeded 540,000 pearls
ATP Price at posting:
8.8¢ Sentiment: Buy Disclosure: Held
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