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119 Posts.

30/09/16

23:16

Post #: 19553645
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Originally posted by alfred137 ↑

I am not familiar with sandalwood so the only things i can depend on to analyse the company are common sense and accounting knowledge. then of course plenty of things i cannot understand and hope someone can explain or discuss.

1. demand: "Majority of harvests through to 2021 now forward sold". we all know sandal wood will produce oil and wood, im wondering "majority of harvests" means all the related product? or just unprocessed wood?
2. Supply: we will have more than 300 tones of heartwood, a tenfold increase on 2015 harvest. We know heartwood is the most valuable part of sandalwood, and can be processed into oil and related product. for the year ending 30 June 2016, product sales contributed $29.8m. Assuming we can transfer all the harvest into sale obviously we will see a very favorable result next year, but what about next? will this result, or growth be sustainable?

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http://www.asx.com.au/asxpdf/20160404/pdf/4368gkypwjdgnc.pdf

Slide 6 (Harvest Profile of Buy-Back MIS Projects) shows the expected harvest proceeds in Tonnes of Heartwood.
Fy16 326t
FY17 228t
FY18 259t
FY19 142t
FY20 168t
FY21 487t

Note that a 2016 harvest will be revealed in FY17 profits as the sales are done in Aug/Sep. And also what proportion of Heartwood TFC owns vs external investors. So you can pretty easily see what sort of earnings trajectory TFC will have from its Products division over the coming years.....

TFC Price at posting: $1.49 Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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