I would say you should very carefully examine the assumptions in the 5.7cps valuation by Pursuit Capital.
For a start, I note that the pearl price (yen/momme) used appears to be 50% higher than that applied in the most recent annual report and valuations. A slightly more favourable Yen:AUD rate is also used for the estimate. I'm also not sure why any rational investor would base their valuation on a 10% discount rate given the large risks (disease/climate/market) that exist in this industry.
Along with the queries on valuation parameters, I find it difficult to match the figures for Turnover and costs with anything in the last couple of annual reports. Nor is it clear why they expect total costs to fall to $4.9m in 2011 on same revenue (employee costs alone were $6.5m in the last annual report).
Overall, to my eyes, the report does not provide a credible valuation - which begs the question as to why they feel the need to market the shares based on a seemingly distorted analysis.
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