In the big picture, I rather like that APA is entering into a less regulated business with higher profit potential in future years. In the short term, I wonder if this move will pressure the share price lower than the offer price of the secondary.
The problem is the existing revenue streams are extremely stable and regulated. That alone is the reason people tolerate such high levels of debt. If they are going to enter higher risk businesses, where pricing could theoretically could drop below cost, that suggests that the market will want a steeper discount to absorb the risks associated with higher debt levels.
It's not the $300M investment alone that is at issue. The $300M investment makes one wonder if in 10 years they might have 1/2 of their cash flows generated by such higher risk assets. Is there a change of business model, not just an isolated investment?
I am not sure how to revalue the enterprise at this point. Just for arguments sake, assuming that 50% of their cash flows came from unregulated assets how would you value that differently? Maybe that should get a 8x EBITDA multiple instead of a 10x+ multiple?
- Forums
- ASX - By Stock
- APA
- change of business model
APA
apa group
Add to My Watchlist
0.36%
!
$8.36

change of business model
Featured News
Add to My Watchlist
What is My Watchlist?
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
|
|||||
Last
$8.36 |
Change
-0.030(0.36%) |
Mkt cap ! $10.90B |
Open | High | Low | Value | Volume |
$8.40 | $8.45 | $8.30 | $9.686M | 1.158M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 13565 | $8.31 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$8.38 | 52 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
5 | 10884 | 8.300 |
2 | 1040 | 8.290 |
2 | 6000 | 8.280 |
1 | 5000 | 8.270 |
1 | 5000 | 8.260 |
Price($) | Vol. | No. |
---|---|---|
8.380 | 52 | 1 |
8.410 | 5000 | 1 |
8.450 | 10344 | 5 |
8.470 | 5012 | 1 |
8.480 | 2100 | 1 |
Last trade - 16.14pm 04/07/2025 (20 minute delay) ? |
Featured News
APA (ASX) Chart |
The Watchlist
NUZ
NEURIZON THERAPEUTICS LIMITED
Dr Michael Thurn, CEO & MD
Dr Michael Thurn
CEO & MD
SPONSORED BY The Market Online