OMH PE of only 3.6x (FYE 2021/22) vs Press Metal PE 72x

The glaring differential between OMH valuation and its peers is too big a gap that the market has failed to recognized time and again. This will ultimately need to be closed when more investors recognized the huge valuation differential and OMH price will slowly but surely need to go up to close the gap, which is what we are seeing in the recent share price/volume run up:
- OMH is likely to achieve its $100m (or more) profit again given the current spike in alloy price wi5 FeSi now hitting $1,500. This is the same level as 2018 when OMH registered record profit of $160m with share price touching $1.70. Based on current market cap of $360m, its forward PE is only 3.6x
- Compared to its peers (1) Press Metal PE is 72x (~market cap A$10b, its 27x bigger than OMH) (2) Lynas is loss making for FY2020 with market cap of A$3.5b, it is 10x bigger than OMH. These are ridiculous valuation gaps that will mean OMH share price will ultimately have been be adjusted upward significantly.

The tide has finally turned for OMH which has been such a super laggard. The rationale for a sustained recovery for OMH rests on the following premise:
- the global liquidity driven bull market for stock is expected to continued into 2021/2022, with rotational play (ie more fund allocation) into valued stocks esp commodities/industrial material which will see the benefits from economy recovery triggered by the vaccine and massive government stimulus.
- Goldman Sach has predicted for long lasting bull market for virtually all commodities as recent under investments, dollar weakness, government spending and the energy transition boosting demand across the board
- Ferroally prices to continue to spike and sustained at high price in view of (1) China pollution control is likely to be strictly enforced (given the economy has recovered and unemployment is no long a big concern), which will result in reduced production capacity of FeSi and MnSi (2) Steel production coming back in Japan an other countries with restarting of more furnaces (3) Reduced ferroalloy capacity outside China, due to under investments in the past and closing of furnaces due to rising power cost.
- Net profit for OMH should recover to pre crisis level of $100-150m at current alloy prices in 2021/2022
- Bursa listing should be catalyst for re rating as they move to stock exchange which will give OMH its fair value, especially when compared to Press Metal. This makes it a compelling investments for many fund managers in Malaysia.

Potential upside for share price: easily 5-Disallowed
- Assuming profit of A$100m (which is the 4-year average 2017-2020), given a 50% discount PE of Press Metal (which is PE 36x), the potential value of OMH could be as high as A$3.6b, which means a share price of A$4.8!!!!
- A potential 10x bagger from its current price of only $0.49