BW Equities Research Report, page-3

To quote Rapstar from ***:

Datt Capital became as significant shareholder late last month, and have provided their thesis in this blog:https://www.datt.com.au/blog/a-high-growth-opportunity-in-volatile-times Their forecasts are very optimistic, I can't come up with earnings anywhere near their estimate. But if they want to pump the stock, it is OK by me........

*** don't allow replies, so it'll have to be here:

Datt - "Our internal growth model suggests a base case EBIT projection for FY21 of ~$6.5 million; with our upper case scenario being multiples of the base case."

BW Equities' research report showed -$232k EBIT in FY21. So $6.5m base case (!) projection for FY21 sure sounds high.

I guess the main way they could come up with that would be to extrapolate from the most recent March/April numbers and expect SWF's market share to accelerate rapidly to >10% or >20%. FY21 being July this year to June next year.

I haven't tried projecting profit out that far. But as a rough target, I'm estimating based on the -3% cashflow margin last quarter (-13% after normalising for delayed payment terms to OM). Then instead of a fine Jan-Feb and super March, let's assume a super April-June. Maybe the revenue can be $1m per month (like March) = $3m for the quarter, and maybe the cashflow margin can rise from -13% to 0-10%. So $0-$300k cashflow profit on $3m revenue.

So $300k quarterly profit could be possible in the near term, and higher a year from now, especially after releasing international trading, I hope. So Datt's number sound possible, but both myself and Datt are sounding more optimistic than BW. I guess we're both just expecting a quicker acceleration in market share than BW anticipated.

Datt is expecting higher profit numbers more than 2 years sooner than BW does. So it sure sounds optimistic. We're only aware of 1 month more details than BW was. In that month the main signs I'm seeing are: ASX has pulled back to usual volumes now, but SWF seemed to have continued to grow market share so may have kept trade volume flat or possibly even grown trades. Strong sign-ups have continued, but I'm not sure if that means up even more than March, or flat, or just better than Feb. Recently I saw a comment from the company "6 staff working on sign-ups, and hiring". Sounds like a lot.


BW look to expect ~5% market share to grow to ~10% market share in 2.5 years time. I'm more optimistic that that. I think in 2-4 quarters. Maybe Datt thinks similarly.