Thanks cadence. Great summary of MBs main points. I’m just...

Thanks cadence. Great summary of MBs main points.

I’m just struggling to understand where I am going wrong in my evaluation of GEV – as every way I look at it, it seems to make sense. But this is a totally new sector for me – so perhaps I’m missing something obvious.

We know GEV has plenty of well mapped out project opportunities – with target FID for 2019 for some of these

• Middle East / India – HOA in place – target FID 2019 – up to 6 boats
• PNG / Winzia – target FID 2019 – up to 4 boats
• UK / Port Meridian – Uniper Gas Sales Agreement extended to 31 December 2019
• Mar Quarterly states GEV is also now scoping two additional markets in Middle East within a shipping distance less than 2,500km
• In the FNN Investor presentation MB makes it clear they are pursuing multiple projects – and have about 10 currently – and only need 1 to see a significant rerate in SP

So – while only 1 project seems the most likely outcome for 2019 – it doesn’t seem ridiculous to consider a situation where up to 10 boats across 2 projects are ordered this year.

SeaQuest Marine – who are assisting GEV / Jens Jensen in evaluating the technical specs from the short-listed shipyards and finalising shipyard selection - state “GEV is on track to complete all pre-construction activities and award contracts to yards by the end of this quarter”. Perhaps I am over interpreting – but I like the emphasis on ‘yards’ rather than ‘yard’ – as more than one may well be needed.

And as described in @cadence post above, MB states ship financing is “not an issue for us going forwards”

Which suggests that almost all the pieces are in place. And all that is left is to see how big this is going to end up being – and how soon.

In terms of how soon - I particularly liked MBs’ comment in the FNN Investor presentation that “At my age, speed is very important…” in terms of getting the SP up. And they are clearly focussed on at least one FID this year (and next month is June!)

He also talks about aiming to simplify the answer to the question “What do I make per ship? What if we announce a four-ship project…” and what the resultant implications for the SP may be.

So, reflecting on this, my dilemma is that a simple calculation looking at the potential number of boats, ‘guestimated’ annual earnings per boat and potential PE ratio for the business almost always ends up with a market cap that makes the current market cap almost laughable.

Surely, I’m missing something? An obvious oversight? Or am I just a victim of my usual overly optimistic prognostications?

But looking at the recent interest in GEV based on volume and SP during April - perhaps not.