I have been wondering how a company with present 1500tonne capacity could have such low sales, approx $2m for 2018 if I remember rightly from prospectus, and have a present $108m (diluted) market value.
Saw today Synlait with $7.4billion mkt cap. had 2018 output 35,850t of infant formla etc, revenue $879m, net profit $74.6m, so $25,000/t revenue, $2,100/t net profit, price/sales ratio 8.4, p/e 100.
So KTD crudely estimated potential revenue for expanded 5000tpa = $125m sales. As a repacker/marketer of bulk buying from the likes of Synlait, profitability unknown but assuming similar then $10.5m net profit?
So in full 5000tpa production, at present $108m market cap, price/sales ratio 0.9, p/e 10.
Still to build and produce but quite a bit of room for underperformance compared to Synlait.
The question remains tho, why are present sales so low despite existing capacity ?? Have to have some faith in management projections and expansion plans for a reason but would appreciate others thoughts on this.
Maybe that explains some of the frenzy, some of the doubts ?
KTD Price at posting:
72.5¢ Sentiment: Buy Disclosure: Held
(20min delay)