i was not talking personal share but the SPO which raised just over 400 M. The management team has a responsibility to maximize share holder value. If they saw anything that should have put SP higher than 4.25 and they should have held. I believe we will see in Q3 report that they did not need the cash raised for almost 9 months so why would they sell if they had any idea company might be worth a lot more? I will bring your attention to accounts receivable . These shifted to use more cash 2020 AR 2021 SAR. This is good news. for years Receivables were very low sometimes less than 10 days sales. 2020 AR 8.2 days 2021 SAR 126 days. This is good news it means they have stopped. all discounting to bring in cash early. Since receivables went from 5.3 M to 58 M it used lots of cash. this should increase sales price which will increase profits. Payables Staid about same but I am sure some time in future they will use cash to get bigger discounts.
Note there may have been some last minute sales at end of Q2 that would cause Receivables to be bigger. Ideal for most corps is keep receivables and payables in balance and both at about 90 days.
Yes there is lots of unrealized potential. Most of this is 4 years out. Most investors buy and sell looking one or two years out. I see nothing in the next two years that is going to increase book value more than 25%. I do see profits growing from 2 cents to 15 cents. UBS says 10 cents But even 15 cents still has a PE of 40. 10 cents is PE of 60. If all the productions restriction are lifted this Q then in H1 2022 profits should jump 25% but REO Prices are falling, slowly, So until some revenue kicks in from 2025 plan I do not see much potential. The earliest I see that is late 2024. Against these positives we have a few risks. REO prices falling at a higher rate. (yes they could go up as well). KAL C&L not in full operation by July 2023. https://lynasrareearths.com/wp-content/uploads/2020/02/200227-Lynas-Malaysia-Operating-Licence-Renewed-for-Three-Years-2034990.pdf That is 26 months away. Is there a risk that Lynas could be shut down in just over 2 years. I do not see this happening but it is a real risk. I bring your attention to the 5 year plan page 28 https://lynasrareearths.com/wp-content/uploads/2019/05/190521-Investor-Day-Presentation-Lynas-2025-1931391.pdf This plan did not show C&L finishing before early 2024. The last update of plan mentioned nothing about the schedule improving. Here is the announcement for Kiln contract. A prefect time to say kiln will be delivered on a given date so operation can commence on date. Nothing, https://lynasrareearths.com/wp-content/uploads/2020/07/200715-Kalgoorlie-Project-Commences-with-Kiln-Contract-Awarded-2085391.pdf
Sorry but my attitude is, Less news is usually bad news. Hopefully I will be wrong this May about half the time has elapsed from original 5 year plan to when C&L is needed. I hope they give a schedule out line to show they will make the Malaysian requirements. These are the most important but info on production increases and Texas would be nice to.
Pease look at page 4 of the capital plan. May 2019. This was suppose to be self funded. did not happen they had to raise 400M through stock dilution. I think this is enough especially if REO prices hold. For ME Missing something as big as how something will be funded a year after 5 year plan put out raises questions about the entire original plan. i will admit I am very loss adverse. So thought I want to buy lynas stock I look for cracks very diligently.
LYC Price at posting:
$6.18 Sentiment: Sell Disclosure: Not Held
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