Great to have our first research report out, thanks for posting
@Lawuki.
Now, I'll get straight to the point - it's rubbish. This could have been initiated 6-12 months ago when we were at 5c if they are just going to base their valuation on 1.5x EBITDA - which is ludicrous. The .57c share price assumes 545m shares on issue (and a CR at 50c) which gives us a valuation of
AUD$310m which is 1.5x EBITDA. I'll take the $310m market cap once Alcoa commits and we have an offtake
They have also used HPA price of USD$24,000/t, however these guys initiated coverage for ATC last year and used a LOM HPA price of USD$32,500/t - WTF? (see below). If they think ATC's base case of USD$26,900 is conservative, then what do they think of FYI's USD24,000/t is?
ATC coverage
These reports are still referencing peer production from 2014 - pleeeeeeease, how embarrassing!
When they initiated coverage for ATC last year, they used a global average EV/EBITDA of
x10 (see below)
FYI coverage they quoted EBITDA range of
5x to 8x
Also, the .57c valuation includes an additional
$50m buffer for working capital which they did not include in their ATC valuation at all. Strange eh?
Anyway, great to have our first coverage, just cast your minds back a few months ago when we were at $12m market cap and our first research reports gives a $310m market cap target.
Lots to play out in the coming weeks and months which none has been mentioned in the report. Giddy up!
