iM3NY Valuation, page-53

Thanks K for your excellent contributions.

I fully agree with your assessments on current value for MNS of Nachu and C4V. However, a couple of your points on the current value of iM3NY that I would like to proffer a different perspective.

1. I see the forthcoming listing of iM3NY as being to set up for expansion firstly to circa 5GWh and establish a market valuation. As you have noted, the amount of capital required for expansion to 15GWh is very dilutive for all existing holders and for that reason I don't see the listing being on the basis you have assumed. So, I am expecting that the listing would raise maybe $250m of new capital.

2. As to current valuation - you have highlighted the valuation of CATL and the growth profile and extrapolated a current value per GWh and also on an multiple basis. I agree with the general methodology, but have a slightly different take on assessment.

Firstly, my research suggests that CATL has fallen behind on its growth - estimated 2021 capacity is currently 163GWh with forecast 2022 now 253GWh (vs 380 in your post) and 2023 at 408GWh (vs 540 in your post). So basing off current forecast 2022 and current market cap: $188bn / 253GWh = $0.74bn / GWh which applied to iM3NY = US$1.34bn valuation. MNS share then is 63% = US$840m = AU$1,120m or $1.07 per share.

Secondly, if they raise $250m to expand to 5GWh in 2023, then some element of that will be priced into the valuation - using the same methodology, 5GWh x $0.74bn = US3.70bn - a difference of US$2.36bn. Assuming the market prices in 25% of that future upside, then add a further US$590m to the valuation at listing - giving an implied $1.93bn. Deduct the cash raised and the pre-money valuation is US$1.68bn - MNS 63% = US$1,058m = AU$1,410m or $1.34 per share.

Adding in K's current value assessments of Nachu and C4V to my current value assessment of iM3NY at listing, we have $1,410m for iM3NY + $236m for C4V + $197m for Nachu = $1,843m or potential $1.75/share underlying value. Of course, "Mr Market" can and will have other ideas, but at least these debates provide some yardsticks on what could be seen in the near term.

As for dilution, if the valuation applied to the listing is US$1.93bn inclusive of a $250m cash raise, then existing holders own 87% and new holders own 13%. Hence MNS would still own 87% of 63% = 54.8% of the enlarged equity base in iM3NY. My numbers are certain to be wrong, but they are illustrative of how dilution can be managed in this forthcoming listing. iM3NY will have to raise additional equity down the track to expand to 15GWh and beyond, but that will likely be against then higher equity valuations (eg at 5GWh capacity, possible equity value of circa $3.7bn per earlier comments, so a $500m equity raise would only dilute existing shareholders by 12% - meaning MNS drops from 54.8% to 48.2%). This staged approach would likely mitigate the levels of current and future dilution.

All of the above is just presented for discussion and illustrative purposes - please DYOR.