jbf cheaper than peers...re post

I hate it when one character stuffs uop the entire document...lol

Here we go again.

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Using adjusted peer comparisons JBF is cheap...

Very cheap!

JBF have assumes just $886 per tonne biodiesel value, versus MBT's $1,137 and SBI's $1029 (and $266/t for Crude Glycerin)

Projections from respective prespectus'...

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Mission Biofuels (MBT):
Income: $1,137 (biodiesel only)
Outgoing: $619 (feedstock, methanol)
Margin = $518 tonne

At 100,000 tonnes per annum, "margin" profit = $51.8m

EPS = 46.6cps (versus pro-forma (IPO) = 33.2cps)

Sterling Biofuels (SBI):
Income: $1,055 (biodiesel & crude glycerin)
Outgoing: $679 (feedstock, methanol)
Margin = $376 tonne

At 100,000 tonnes per annum, "margin" profit = $37.6m

EPS = 48.2cps (versus pro-forma (IPO) = 31.56cps)

Jupiter Biofuels (JBF):
Income: $886 (biodiesel & crude glycerin)
Outgoing: $683
Margin = $203

At 250,000 tonnes per annum, "margin" profit = $50.75m
EPS = 19.4cps (versus pro-forma (IPO) = 10.8cps)

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Now for some fun...

If we apply the JBF peer "projected numbers" to the JBF prospectus we get some interesting results...

Adopt MBT margin...$518:
At JBF's 250,000 tonnes per annum, margin profit = $129.5m
EPS = 49.4cps (currently 19.4)

Adopt SBI margin...$376
At 250,000 tonnes per annum, margin profit = $94m
EPS = 35.9cps (currently 19.4)

Adopt JBF's current Margin...$203
At 250,000 tonnes per annum, margin profit = $50.75m
EPS = 19.4cps

Clearly, JBF's figures are not only conservative, but offer the greatest upside potential compared to their peers.

Adopting SBI's numbers suggests an 85% premium on JBF's par value...or 92.5c on listing

Adoption MTB's numbers suggests a 155% premium on JBF's par value...or $1.27 on listing

Load up people...the market will see the value here.

Cheers!

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Figures used for comparisons.


Mission Biofuels (MBT)
Listed May 2006
Listing price: $1
Currently: $1.30
High:$1.80
Low:$1.25
Shares on issue (fully diluted at listing) = 111m

Assumptions (outgoing):

Feedstock = $580 tonne
Methanol = $39 per tonne feedstock ($390 tonne)

Total = $619 tonne

Assumptions (income):

Biodiesel price = $1,137 tonne
Purified Glycerin = $64.2 per tonne of biodiesel produced ($642 tonne)

Total = $1,201 tonne

Margin = $582

EBITDA = $37.5m (adjusted to 12 months)
NPAT = $36.88 (adjusted to 12 months)

EPS = 33.2cps (111m shares)

Comments:

Low feedstock costs and high projected Biofuels/Glycerin reciepts suggests very aggressive pricing model...might find it difficult to meet projections? This may explain their plans for expanding?

Recent fall in share price from about $1.50 (50% premium on original listing price) is mainly attributable, in my view, to falling oil price and potential capital raising (dulition) due to the expansion plans of moving from the currnet 100,000 to 250,000 tonnes per annum capacity. (similar to Jupiter Biofuels)

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Sterling Biofuels (SBI)
Listed: (expected shortly)
Listing price: $1
Currently:
High:
Low:
Shares on issue (fully diluted at listing) = 78m

Assumptions per tonne (outgoing):

Feedstock = $636 tonne
Methanol = $43.6 per tonne feedstock($436 tonne)

Total = $679 tonne

Assumptions per tonne (income):

Biodiesel price = $1029 tonne
Crude Glycerin = $26.6 per tonne of biodiesel produced ($266 tonne)

Total = $1,056 tonne

Margin = $377 per tonne

EBITDA = $26.14m (adjusted to 12 months)
NPAT = $24.62m (adjusted to 12 months)

EPS = 31.56cps (78m shares)

Comments:
Oversubscribed, in spite of relatively high Crude Glycerin and Biodiesel prices in value model.

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Jupiter Biofuels (JBF)
Listed (November)
Listing price: $0.50
Currently:
High:
Low:
Shares on issue (fully diluted at listing) = 262m

Assumptions (outgoing):

Feedstock = $641 tonne
Methanol = $41.8 per tonne of feedstock ($418 tonne)

Total = $683 tonne

Assumptions (income):

Biodiesel price = $886 tonne
Crude Glycerin = $0 tonne

Total = $886 tonne

Margin = $203

EBITDA = $30.45m (adjusted to 12 months)
NPAT = $28.30 (adjusted to 12 months)

EPS = 10.8cps

Comments:
By far, JBF uses the highest outgoing versus income ratio, resulting in a margin per tonne of just $203...and perhaps more importantly, uses zero imputs for crude glycerin production. It sems fairly obvious they will far exceed all projections.

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