GNC General Discussion, page-312

A few highlights from Macquarie's latest research report:

- Seasonal outlook improved with recent rain; 2024 growing year settingup well.

- Valuation remains undemanding, in our view; GNC trading at discountto peers, its historical avgs and to our asset replacement cost est.

- The 2023/24 east coast winter harvest looks to have surpassed marketand our expectations with GNC interim receivals of 7.9mmt (vs ourprior fct of ~7.5mmt). Better-than-expected harvest is a boost to GNC'sStorage & Logistics biz and magnified by the ~25% increase in receivalfees. Offsetting this is GNC's introduction of a free storage period of ~6months (we est ~$20m rev impact).

- Outlook for planting/growing season has improved markedly overpast 3 months with timely rainfall in Nov-Jan, improvement in soilmoisture (Fig 16) and as fears of a dry summer go unfounded. We expectuplift to FY24 summer crop output vs FY23

- B/S rock solid; we fct core net cash of $340m in FY24 and FCF of $64mgiving GNC ample capacity for organic growth, e.g., crush expansion, M&Aand announced up-to $50m buyback

- Valuation: TP of $9.70 unchanged using avg of asset replacement cost &through-the-cycle earnings. Our asset replacement cost analysis suggestslarge gap between share px & intrinsic value providing valn support.