In reply to
https://hotcopper.com.au/threads/general-gnx-news.2917220/?post_id=56114320Hey Dabozza - replyingto your post from 16 Sep. I hope you're right mate re: ”FY26 will be at least $0.75c in a bearishscenario, $1.17 in a likely scenario, and +$1.69 in a bullish”!!Would make for a happy retirement!
The broker analystvaluations are currently between $0.29 and $0.35 but they apply little value tothe GNX pipeline and a big discount to hydro due to the construction risk and 3year wait for cash flow.
Long term contracts onthe funded projects which deliver average revenue of $82.5m and 79% EBITDAmargin are surely worth MUCH more than $0.35!!(Anyone want to have a guess?)
Are the Analyststaking into account a tight fully wrapped EPC contract before they apply such aharsh construction discount? (As I’ve mentioned previously, once theunderground cavern is hollowed out (according to their milestones: October2022) most of the rest of the build is fit out. And given this sort of fit outhas happened 100’s of times in the past 100 years, surely there is then NOrisk, even though the EPC contract is already FIXED from now).
The Analysts mightalso be concerned about the level of gearing, which again needs to beconsidered in the context of GOVERNMENT GUARANTEED finance and strongrevenue contracts, which for the most part don’t vary with energy prices. GNX management has copped some criticism for potentially giving away some ofthe upside cream, but at least it should make the mathematical share valueeasier to calculate. 
Thoughts?
