PET-conomics

I’ve created a new thread for all things economic in the growingworld of PET.

In just a few short years, we have continued to see their ‘largestproject yet’, continue to be eclipsed, which would be one of the importantbenchmarks. It confirms the distinguished status of becoming the globalstandard for water remediation with eutrophication issues. Worthy of mentionare also the consistency of successful high volume dosages without side-effects or wastage and providing maximum effectiveness. PET are turning into or have became a status symbol in the industry. So now, even UNESCO, as the global governing body for the worlds water health are providing that acknowledgement!

In terms of the ASX, I’ve said it before, PEThas in the last couple of months, been grouped generally to small cap growthstocks that have unsupported blue sky, mostly that are young, have largeamounts of debt, surviving from ongoing capital raises and in some cases, anunproven BOD’s. It’s not an accurate categorisation for PET to be grouped withthese company’s and suggest it won’t last. In comparison, PET offer proven commercialcredentials and volumes of scientific support across many jurisdictions. It’s astrong and importantly, ‘SUSTAINABLY’ growing business model that is doublingPET revenue year on year, along with a BOD highly regarded in business circles,which defines PET. Its also important to acknowledge that PET BOD’s are expanding the company internationally very successfully, a complex global business at an impressive and SUSTAINABLE rate which happens to include managing larger water body contacts, larger production output, increased global personnel resources, larger research and administration facilities, reliably building the science and ability to construct precise application models for water bodies of all sizes with an ever increasing variables and large engineering demands as part of the wholistic solution, etcetera. The rate of growth needs to be measured and managed so it continues to be effective and sustainably worlds best, and it has and it is, done right. This is what you are paying for!

The Dianchi project’s product application appears to be worth more thanthe Market Cap of the company today and that’s not including engineeringrevenue or the indefinite ongoing years of annuity for maintenance revenue ofthis one job, and that does not include any of the other large jobs to comefrom the growing pipeline nor does it include other large jobs in progress…Xinghun for example, yet to begin the next stage of several further largestages… I have to say, perhaps for myself and some other long termers or morerecent true believers that have done their research, is that Dianchi may nothave been much of a surprise. Especially having already experienced theevidence of such impressive cumulative success in recent years from this wellassembled, world class, PET team. So, that is why increasing holdings andcontinuing to buy or paying higher prices at higher valuations was possible andjustified, especially as the picture of possibilities becomes even more evidentnow… We will obviously be hearing more about this. The order of success frombringing a project trial to full implementation is unprecedented and it’simportant to understand that my understanding and experience of PET trials aredefined more as an opportunity for information gathering on how to articulatethere application models. A ‘how’ rather than an ‘if’. That is a very importantdistinction. To scale, it now appears to further strengthen the ability of PETto enter the league of dividend paying company’s. There requires no greatertestimony to the efficacy and strength of a business than it’s growing vault ofcash surpluses from the growing sales of proven service and products that haveevolved from the most rigorous, private and governmental scientific tests, overand over again, that unequivocallyprovides a solution for managing cyanobacteria and other algae blooms bymitigating nutrient loading by binding phosphate through the water column andas a sediment capping layer. With such impressive financials, I sometimeswonder if PET is already being considered as an attractive acquisition for aprivate or other equity firm at this early stage of its development?

Of course, the international pipeline continues to grow and with eachnew success qualifies several new opportunities. Well done #Mickem forincluding Dianchi as a likely next job out of China and to you and others foryour ongoing time and research from international sources. The PET HC threadsappears to be increasingly attracting some quality contributors and this canonly be a good thing as we move ahead.

As recent as last week, the highest level of Chinese governmentofficials have again, recently confirmed the war on pollution as one of the 3highest agenda mandate’s. None more so as important enough as the ‘China’sThousands Talent Programe’, intended to lure international Chinese talent backhome to what needs to be an ever evolving, ‘Beautiful China’. It’s believedthat it is integral to spur current and future industry growth to new levelsand ultimately drive the transition to a consumer driven economy and achievingthe doubling of incomes across the entire mainland. Restoring China’s waterbodies, is front and centre of their policy agenda and importantly, lets notforget that PET have already been endorsed by China Governmental ‘Ministry ofWater’! Health of local water bodies influences so many local industries, foranywhere in the world for that matter and has been identified to be one of theessential elements to provide the ability to confirm, the rise of China. Hence,why I have created this new thread, PET-conomics .

There was a brief discussion recently about margins and it seems to havebeen well addressed. As a note, I will remind some people though, that the Australiancompany known as Phoslock Environmental Technologies own a patentedproprietorship product which commands an acceptable premium in its own right.Historically, corruption amongst Chinese government officials was rife untilrecent years and billions of yuan/dollars intended for infrastructureinvestment and restoration work, was poorly managed by local industry and so, alot of that money disappeared with-out ever achieving the promise that wasintended. There has since been necessary change in China and a much greatervalue placed on and willingness to engage foreign expertise from reputablejurisdictions such as Australia for the trustworthy management and supply ofproprietorship products and services from a proven Board of Directors, with thehighest integrity and international reputations, of which, PET are able toprovide J.

Chinese aspirations are vast. As we already know, they also haveadditional aspirations in surrounding areas which all require wholistic grandscale engineering and ecological services for water treatment which would suitthe product and services PET are able to provide. Product and upsellingservices now increasingly combining hand in hand. This will continue evenmoreso with the commencement of the commercial availability its broader productsuite in 2020. There is a quantum shift that has begun that will endure yearsand decades of many billions of dollars of proactive and ecological restorationand development requirements. All this has already insightfully been alluded toby #Mickem and also in a recent Company announcements, being, that these newvast market segments have now been included in PET’s focus...

What to do now, well, if PET quickly shot back to say $1.30 in the nearterm, what would you do? Although specific numbers are yet to be released, it’sappears that the forward earnings based on current prices and with the knowncurrent jobs will be conservative, but that’s probably not a surprise to some.So that appears to be inviting an upward spike at some stage in the foreseeablefuture unless of course there is a steady creep upwards. But hey, when is themarket ever rational and exact… As we all know, it sometimes doesn’t take muchfor a change of sentiment to swing and momentum can build quickly, especiallyfor a quality company. At the moment, most fund managers and private investorsare already in holiday mode or literally away from the desks until everyone isback on deck in the new year. Can we hear more news in the meantime? Who knows?Is this an added opportunity?

All of this as my personal observation of course and always has beenthese past few years , so DYOR.

Oh, and there’s a gapabove $1.62…