Given the high alloy prices, and the fact that Sarawak has...

Given the high alloy prices, and the fact that Sarawak has already re-started 12 furnaces, I would expect Smelter Profit to be ~ US$60m per quarter going forward. The figure should not be difficult to calculate at current spot prices of FeSi at US$1,920 (Cost US$1,000) and MnSi at US$1,545 (cost US$850)

This does not include contribution from other division eg Tship (A$15-20m per year) and Trading.

I am also quite optimistic on the 1H2021 results (despite 1 month plant closure) as the OMH sold more inventory in 2Q at higher prices compared to 1Q. FeSi sold in 2Q – 30K ton (vis-à-vis 1Q of 25K ton) and MnSi sold in 2Q – 50K ton (same as 1Q of 50K ton). Based on higher alloy prices, OMH Smelter Profit for 1H21 could be as high as US$70m.

I still believe the recent selldown is still the same shortseller manipulating the stock to cover at lower price. It seems quite easy given the low liquidity, as most of the buy/sell vol are the works of the shortseller.

OMH’s mkt cap of A$550m is only PE 2x and EDITDA 1.5x that I am not surprised takeover offer would still be attractive at 2x market cap. The buyer need only to round up 20% to be largest shareholder and potentially can take control if he can garner support of the other big shareholders. Takeover almost happen in 2008, I don’t see why not now given the high alloy prices likely to be sustained in the near future. Remember that there has not been such a huge investments smelting industry (like OMH which invested >US$500m) for the last 10-15 years.

The potential buyer could easily turn this into multi-billion market cap if they are savvy with capital markets and engage good IR/PR strategy to enhance shareholder value. Unfortunately, the current team is just not able to generate investor interest in OMH even with Bursa listing.