Australia's largest stock trading and investment forum Australia's #1 stock forum

GXY

Click for more information

0.00%

$5.28 galaxy resources limited

Chart, page-9590

First 9590 Last

Share
Profile

Follow
R66

98 Posts.

24

15/08/18

13:42

Post #: 34953228
Share
Originally posted by Subs ↑

China's overall economy is not as good as it looks. Realistic GDP of China have been subject to much debate. China's debt level have risen drastically since 2008 reaching a new time high this year. The economy is now heavily leveraged on debt. If this debt level is handled by quantitative easing then the purchasing power will substantially reduce thus affecting the possibility of auto maker to continue sourcing lithium from overseas markets. This brings us to the next question.

China is backed by increasing levels of gold. Not paper, gold.

Lithium inherently is not as rare element. Morgan Stanley's report holds a level of truth that lithium price might substantially drop. The opposite side of this argument is 1. Rising demand 2. Difficulties in entering production. Either of those is difficult to precisely predict at the moment due to complexities that and unforeseeable economic circumstances. MS’s report and report from various model are only predictions.

No it isn’t rare. But the knowledge to turn it into a battery grade product most certainly is. Morgan Stanley also fails to see the demand created by things other than EV’s in their report.

As China lithium market is what GXY is in, it’s important to understand Lithium price changes in China. Despite many have given optimistic speculations on lithium price in coming months, currently we have seen a drop of over 36% in the last 360 days according to ASIAN METAL. Regardless what good cheer is spread by those happy hopping rabbits, the market has spoken. It is now the clear fact that Chinese are unwilling to pay more for lithium. Anyone who is already invested in the market understands that price is merely a voluntary consensus of the value of goods being traded. Thus lithium seller/miner are ok to accept this lower offer from buyers. As I have pointed out in Charts before, GXY's lithium price have followed lithium price in almost the exact same pattern. Thus shorting stock based on the lithium index is one tool for increasing the possibility of profit when shorting. Again I'd like to point out that high volume shorting of GXY isn't because of the possibility of POSCO deal falling through, it’s been heavily shorted long before news of POSCO deal. The holders need to understand that shorting of GXY follow the market's bearish prospect on lithium price. Although I would comment that POSCO deal with place GXY in a significantly better financial situation.

Our product is being used in Lithium batteries as we speak. It is high quality and is NOT part of the China pricing. Try and discredit those spreading “good cheer” as you call it, but you are wrong.

Take our last shipment pricing, higher than the previous. But you claim “Chinese are unwilling to pay more for lithium” – Bull Sheet.

Following the lithium price charts? Sure, it seems the shorters have used this as a way to create panic. Doesn’t mean there is a link, the price is being manipulated. Obvious, undeniable, a 5 year old could figure that out.

SDV is why most Longs are here. SDV will also NOT rely on any China pricing site either. The China pricing is for LOW QUALITY PRODUCT. I mean the CEO of Albemarle DOESN’T EVEN LOOK AT THE CHINA PRICING. Read the Q&A from the last Quarterly, China Pricing IS IRRELEVANT.

Posco deal allows us to develop SDV into arguably the best Lithium Project in the world.

Price of lithium is subject to much unknown speculation inherently increases risk exposure of the holders. Considering the current earnings of the stock, GXY is not much of a bargain as some suggest. This is clearly shown by the PE ratio, GXY's price at 4.50 had an unjustified PE ratio. The value of the share could only be justified from PE/G ratio because growth will sustain the share value. While PE/G ratio have been more than stellar in the past year the important question is can this be maintained. But with above factors mentioned growth at this stage is not ensured. It is however possibly to profit greatly from GXY. But of course, this association with high risks must be understood.

The realised price of Lithium has been rising despite the CHINA price falls. Demand is increasing exponentially and the big lithium miners are making record profits, record pricing, record demand. These numbers do not lie.

Unjustified PE Ratio? Er… Mt Cattlin alone justifies a much higher share price than we have now. I notice you claim PE ratio’s, but don’t back it up with ANY numbers? Many Longs here have run the numbers, see the posts. The only thing unjustified is the LOW PE Ratio we see now.

Never mind forward looking ratio’s, lol. Seriously.

“Growth at this stage is not ensured” – The POSCO deal will sort that out. It is close. It is a game changer.

Seriously, questioning the growth potential here? Now that is funny.

Subsidies given by government to EV industry is likely to help EV growth at in the current and the last quarter. EV maker needing to meet government goals is a possible catalyst for another jump in lithium price in coming months.

As scale of production rises with demand, the reliance on subsidies to get the pricing on a more even playing field with ICE vehicles becomes unnecessary.

Once SDV and JB enter production without issues, GXY will be in a much stronger position than it is now. Even if lithium price is to drop in following years, higher amount of production and sales can compensate for lower profit margins. Lithium price projection with POSCO even showed a reduction in lithium price till 2020 where price will rise again after 2020. This model is again only a calculated speculation but gives more context for investors to consider their position.

Yes, GXY will be in a much stronger position. Now just imagine that position when the Lithium price doesn’t drop. The demand is obvious. The supply coming on board will not keep up. That view is held by many Lithium Sector experts.

Fixed price off-take agreement at MC gives GXY a much more stable financial health compared with many other lithium makers. This move of hedging against drop in lithium price is reflective of the visionary management we have. While reduction in lithium price might not affect GXY, the flip side of this coin is GXY will also not benefit from growing lithium price. If management is sure to do the fixed price deal then they are also aware of the possibility of profit margin to drop thus took action to hedge against the risk. The price of GXY at the moment is in my opinion attractive for long term investors with high risk tolerance who doesn’t need to perfectly time the entry.

You have not done your research (no surprise). You clearly do not know the details of our offtake agreement. If any readers think this is accurate, they should go back to the DYOR part again, as they have failed.

Potential buyer in GXY must consider the above possibilities before being talked into this by family, friends or those habitual buy sentiments. It is in my opinion that GXY is a relatively high risk high reward investment with a maturity age of 3 years. Risky is multi-dimensional and different for every investor thus every investor should consider his own circumstances and set up proper risk management.

----------------

And they should also most certainly DYOR before taking advice like this. It is full of holes.

Think about it. If retail investors come in now and start buying more and more shares (like the broker reports say they are) then all the work these Insto shorters have done is for nothing. They NEED you not to buy at this incredibly important stage in their game.

Find the reason behind the post before you decide to act upon it. The giveaway is usually statements like "those habitual buy sentiments". The number of posters looking to discredit mine and other's posters that are here to debunk the BS is a clear indicator / good place to start. Then go back and look at the type of posts that were flooding the charts thread before the last run began, see any similarity?

Expand

good to know you actually have your research and facts backed. I will re-evaluate my position again and make another review in a week time.
GXY Price at posting: $2.58 Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

Reply

Top Stories

CYM

WA Nifty copper project steps closer to restart with Cyprium Metals inking $40M loan from Glencore

PYC

PYC achieves key designation for drug aiming to treat blinding eye disease ADOA

CCO

The Calmer Co’s Anthony Noble reflects on record breaking FY24

Consumer Staples Shine Amid Retail Slump – Key Stocks to Watch

Week 35 Wrap: HotCopper’s top watched; ‘iron ore winter’ has started; Oz inflation @ 3.5% MoM; Harris fracking flip

VYS

Vysarn acquires Waste Water Services Pty Ltd for $7.5M; WWS to become subsidiary as expansion continues

HVN

Consumers cautious according to Harvey Norman, as profit slumps 35% in FY24

TBN

Tamboran kicks off Shenandoah South pilot project with SS-2H well spud

HLX

Helix investor makes partial takeover bid, proposing board changes

LLC

Lendlease sells off US east coast construction operations in latest global divestment push

There are more pages in this discussion • 13,877 more messages in this thread...

First 9590 Last

Add GXY (ASX) to my watchlist

SPONSORED BY