Agree that support earnings will be lower margin but disagree...

Agree that support earnings will be lower margin but disagree that intrinsic value is zero

@zeus1234

I did not say at any point that future Support earnings will be at a lower margin; my present concern there is more about whether Support revenue can be substantially and dependably grown, as Management had previously indicated; I have read the presentations from the past few years, and the words “totally aspirational” in relation to their target revenue are entirely new to me.

When I say “zero intrinsic value” for the shipbuilding optionality, I am referring to future shipbuilding orders only, not to the Support business or to the existing order book. There is certainly positive intrinsic value in the current Net Cash, as well as in the predictable residual FCF from existing orders.

and believe zero growth in order book is unreasonable. I actually believe ASB's ability to win new contracts is what underpins its valuation (namely its design and tech, its operating setup in multi-jurisdictions, and the flexibility of its operations).

With regard to growth in the order book, I personally consider it reasonable to expect that there will be some (in the form of new shipbuilding orders) in the future, and that it will generate positive FCF over the life of the new projects. That possible future NPV, though (which, sticking to the option analogy, contributes to the “time value”), needs to be balanced against the cost of keeping operations running, possibly past completion of the current order book, as well as general opportunity cost.

If you have chosen to hold, because the overall risk/reward still looks compelling to you, that’s perfectly fine with me and best of luck with it.

Cheers