$2 - $5 is about what I get if the trials verify prospectus calculations and the company doesn't make any more containers. At present, the market is pricing in a complete failure of the tests, or at least that they will do no better than the pond method, imo. But if the tests are successful, if Holcim want the rest of their order for 1,000, if Kerui want their 250, and if a government were to stimulate demand for AEB's containers by, for example, introducing a carbon tax, then I suspect the price might be somewhat higher. As far as I can tell, it seems to take 9 months to build, ship and install a container. Longer if it rains. If that timetable holds for Holcim Lanka, then their algae containers should be commissioned in October/November. That should give a loss for the year to June, a $20+m profit to December, and $60+m for June 2013. My guesses, anyway. If the trials hold up, the biggest problem for AEB is going to be to meet demand in a reasonable time frame.
AEB Price at posting:
40.0¢ Sentiment: LT Buy Disclosure: Held
