Ok. Getting back on track ‘massively undervalued’. I’m really...

Ok. Getting back on track ‘massively undervalued’. I’m really trying to crunch the numbers and put some perspective on the next few months and years. I’m a LT holder. 5 years I reckon
Don’t care much for tomorrow’s ups or downs. Even week by week doesn’t matter. I’m more of a quarter by quarter investor.
So, where are we heading? The following is my back of the envelope doodling.
-Spod is on the rise. No doubt. Currently we make about $60USD profit/tonne. With Spod rising by the day I’m hopeful that by end of FY21 the profit/tonne is more like $USD250-300/tonne 4x increase by June.
-Sales increasing. 38% on previous quarter. Let’s map that out. Sep 20 quarter 43600dmt. Dec 20 quarter 70600 dmt. March 21 quarter? Conservative estimate 25% increase. 88250 dmt And June 21 quarter 25% increase 110300. *we’re gonna need more trucks!

At $USD $250/tonne profit and 110000 dmt sales for the June 21 quarter. That is a staggering AU$37,500,000 profit For the quarter. Now don’t forget some have tipped Spod should be priced at US$800 to promote capex in the lithium industry. Wow!

So why the low share price? We haven’t had a cash flow positive quarter yet. We have been losing money up until now. Hopefully Dec 20 will be our first. From here on it only gets better. Quarter on quarter increases. Announcements of record sales and record cash flow. A positive full year result without dilution. 2022, a significant % increase on the previous FY result. This will be when the jaws really drop. It’s going to be a mic drop moment

Imagine Spod at US$800 dmt. 2023-2024. We move 400-500kdmt/q. That’s a quarter profit of US$240m. Nearly US$1b p.a. Or AU$1.298 b pa. Gives us EPS of .44 cents.
Now we have to imagine a fair P/E. The ASX currently has an average PE of 23-24. I think we are better than that. I’m going PE x30.

My estimation of share price FY 2024 is $13.42. 11 bags in 3.5 years.

cheers