All true and inevitable. The nuclear application is as exciting...

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alonso

16,999 Posts.

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31/03/21

15:11

Post #: 52176760
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Originally posted by men_at_work: ↑

The market hasn't quiet understood the significance of the recent Defence MOU with Hanwha last week so it's time to shine a spotlight in the numbers involved with this soon-to-be contract. Hanwha are preferred bidders (meaning only bidders) to the Land 8116 contract building propelled artillery vehicles to commence production in 2022 in Australia. The contract size is approx. $2.6bn over minimum 5 years. K-TIG has successfully proven to weld high strength armoured plate steel and in the defence industry you don't sign an MOU without already knowing the technology works. Not many would have seen this little gem in the K-TIG presentation released this week but it definitely is not a typo. It stated K-TIG's domestic Armoured vehicle market (Hanwha deal) is USD $100m p.a. considering the facility and land capex will be embedded into the total Hanwha contract the margins for KTG will be very good. let's say around 40% EBITDA and 15-20% NPAT margins. Now you can see how this plays out. Only bidder Hanwha wins the 8116 contract in early 2022. KTG wins armoured steel plate revenue contract after it completes the 24weeks trial (Oct/Nov 2021). Construction starts all 2022. First contracted revenues to flow 2H22. KTG will be generating annualised revenues around $100m and NPAT of 15-20m. For a market comparison EOS made $18m profits 2 FY Ago with a mkt cap of $800m. last Fy EOS lost $20m and still $800m cap! EOS was trading on 44x earnings. Codan is trading on 33x earnings. I can comfortably call KTG a Disallowed from 44c and my price target for 12mths is $6 a share. Add on UK and US nuclear turnkey plants and potentially Australian made LAND400 contract over next 2-3 years my price target for multiple years is closer to $10+. KTG has a definitely clear and unmatched advantage in the defence armoured steel welding and now Hanwha ($40bn monster) have made the first move all other defence vehicle bidders will be looking to include KTIG seamless automated welding to their existing and future contracts. please DYOR and study the KTG investor presentation. KTG ridiculous cheap now at $60m valuation..

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All true and inevitable. The nuclear application is as exciting if not more than the military.

KTG Price at posting: 45.0¢ Sentiment: Hold Disclosure: Held
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