It's important for new investors to understand what Moelis' figures are based on.
(The truth that Y doesn't want you to know.)
This following is Y's continually repeated post.
"As I said earlier Moelis have a report that says AJX will make a $6 million loss in 2017.Everyone here will just dispel what Moelis have forecast without even asking the directors if it is right or wrong and what is their forecast."
(Y's post)
http://hotcopper.com.au/posts/20688362/single
Let's take a look at what Moelis base their figures on!
This is the terminology used in the March report (this is the report all the others have copied.)
For each end-user market detailed below, we use the MarketsandMarkets industry growth rates and, given AJX’s superior product, we assume AJX will achieve above market growth rates. Our understanding is that the growth rates in the MarketsandMarkets research are internal growth rates e.g. a company that has made 100,000 beds this year will hope to sell 105,900 next year and will subsequently need more flame retardant chemicals for those additional beds. In addition to these market growth rates, we have assumed that AJX converts 1 trial customer to a revenue contract per end-user market per year. Given the regulation changes, positive feedback from existing customers and AJX’s superior product, we would think that they would convert more than 1 customer per year, however, we have preferred to remain conservative.
- We view our revenue growth rates for the different end-user industries as conservative. We note that AJX’s sales pipeline (trial customers) is ~10x the size of its list of “won” clients. As regulation continues to push the flame retardant market towards solutions like AJX’s, the company should continue to convert those trial customers into sales and pursue new sales opportunities. In our numbers, we have assumed that AJX converts 1 trial customer into a revenue generating customer per year.
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These are the estimated customers in each industry for 2017 from the Moelis report (remember they're basing our projected revenue and losses on these figures).
Industry Customer numbers
Bedding 7
Military 2
Transportation 6
Outdoor 3
Costings and polymers 2
This is what the company have released about customers.
Out of the final preliminary report
The Company’s sales pipeline increase of 650%
The Company’s sales pipeline, which has grown from 20 to 165, represents future revenue.
Identification and contact of 365 target leads for AlexicoolTM
Active prospecting is underway, with 240 leads in the U.S. and 125 in Europe. The two newest clients for Alexicool TM represent a total of US$2 million annually. The Company forecasts US$15 million per annum in revenue starting in CY2017 from the growing PCM market.
Expansion into new international markets
Sales have increased worldwide due to the successful implementation of a global distribution network.
Alexium has a presence in Europe, Asia, the Middle East, South America, Australia and New Zealand through over 70 sales executives employed by our distributors. The Company also has toll manufacturing relationships in Australia and Europe with planned new relationships in Asia and Latin America to meet demand.
http://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvFDZpiw/UlRScquh49cdNT7rIGo8VXB5kPlHhlFA=
ALSO
Out of the last 4C on the 30-9-16.
Sustained Increase in Sales Pipeline
A key leading indicator of Alexium’s growth potential is the opportunities in the sales “pipeline”. During the reporting period, Alexium maintained its strong retention of customers in the pipeline at over 90%. In addition, just during the last 3 months, the Company increased the pipeline opportunities in our core FR businesses by 58%. This significant increase in pipeline opportunities during the period is a result of success in key elements of Alexium’s strategy:
http://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvFDZpiwa5l0KorOh49cdNT7rIH4ESXxNgP1HhlFA=
So we had 165 customers in the final preliminary report, in the 4C (3 months later) that number had grew by 58%, that's 96 extra customers in 3 months, giving a grand total of 261 customers as of the release of the 4C.
Moelis projected revenue figures are based on 20 customers in 2017, we already have 261 customers, so basing any argument on their current figures is ridiculous, at current customer growth we will have approximately 500 customers in various stages of the pipeline by mid next year with a 90% plus retention rate.
True forward looking revenue projections need to be worked out on 90% of 500, which is 450 customers, not 20 as Moelis are using now for 2017!
https://alexiuminternational.com/wp-content/uploads/2016/06/AJX-initiation.pdf
In summary, the financial PROJECTIONS from the Moelis report regarding a loss for 2017, are worked out on Alexium having 20 customers, I think that's already proven to be absurd!
Cheers.
