Macq Bank upgrades $GXY, page-42

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20/06/17

12:35

Post #: 25378440
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Originally posted by yanlin ↑

Mac Bank still don't like GXY for some reason.
This report is full of holes and misinformation.
E.g. comments such as this: "....Whilst progress is being made, the ramp up of new supply at Mt Marion and Mt Cattlin has been slower than anticipated. It appears that technical difficulties at the mines and potentially in integrating new concentrate feed into existing conversion capacity are abundant....."
I thought we had already ramped up to nameplate production. Does MacBank know something that GXY management does not know???

Or, how about this: ".... Earnings for GXY in FY17 and FY18 are unchanged due to the contracted nature of sales...."
When did GXY lock in 2018 pricing??? Why weren't we told.... (if this was the case)??

But my favourite bit of selective editing is the pricing used in the models for GXY and PLS. Here are the forward price assumptions for spod pricing MacBank uses in its valuations:

ASSUMPTIONS FY17e FY18e FY19e FY20e
GXY Spod US$/t 904 648 646 689
PLS Spod US$/t 868 812 757 720
Variance (4.1%) +20.2% +14.7% +4.3%

These revenue assumptions are simply CRAP. I have never seen a more one-sided and biased analysis ever.

These guys should have to justify this to ASIC in order to keep their professional accreditation!!!

Expand

I'm no Mac Bank supporter in any way, but regarding their statement, ".... Earnings for GXY in FY17 and FY18 are unchanged due to the contracted nature of sales...." I think that it's because.

- They're talking about financial years (July to June) and FY17 is almost over.
- GXY's financial years are actually the same as calendar years (January to December).
- You'll notice that we are only getting 2017 contract prices now, so for FY18 we will only earn our 2017 contract prices.

GXY Price at posting: $1.71 Sentiment: Buy Disclosure: Held
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