ECS Initiation Report - Pitt Street Research, page-15

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13/09/21

11:55

Post #: 56017250
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Originally posted by Wint0nlc ↑

The extraction machine is mentioned on page 7 and page 9 of the Pitt Street report as being redirected to Murray Meds.

There are some curious estimates in the forecast financials on page 29 of the Pitt Street report, looking only at '2022e':

$6.2m revenue, revenue growth 400% - the estimate is conflicting with the notes to the financial statements in the company's annual report which states that no contingent liability was recorded for Performance Rights B (revenue > $2.5m in financial year within 3 years of listing) as management consider achieving the milestone possible but not probable.

$0.3m capital expenditure - spending predicted to almost cease in contrast to previous period spending and management's cropping expansion plans for VIC and TAS.

$0.2m depreciation and amortisation - seems rather low when ~$3.4m spent last year on PPE and amortisation on intangibles was $90k (refer to notes 13 and 14 of annual). A thought that comes to my mind is that a significant proportion of those assets are not expected to be ready for use in FY22??

What is the general consensus on the independence of these paid research reports?

I felt the dark shadow of conflict encroaching just typing that sentence.

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I just look at this as a paid advertisement from ECS, they literally did pay for this if you look at the last page of the report, so I dont really look at it as an objective view of the company, more like an advertisement.

I just hope it gets some more people looking into ECS. I think they should of included peer comparsions rather than the dubious valuations, peer comparisons truly does help show how undervalued ECS is , as you have companies on the asx producing less but valued higher.

Anyway its PR which is good and what I have been asking for, so cant complain, just wish they got this out on more platforms, start doing online interviews, cheers @Rhino1963 for posting it otherwise I wouldnt have seen it!
ECS Price at posting: 3.5¢ Sentiment: Buy Disclosure: Held
6 Upvote

1 Great analysis

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