report

I see that Fosters have bought out a report on YOW this morning, they have a SP target of $1.20, a few points from the report, in my own words, are below, I wont put up the points that are already quite well known:

#####

They talk of how the likes of Kinder Surprise not being able to sell in the US because of being considered a choking hazard. They talk of the "significant" 'safe capsule' commercial advantage which is key to YOW launching in the US and the exclusive use they have of the patent with Hank Whetstone.

Us market alone has the potential of multiple hundreds of millions of unit p/a and that sales launch is expected next quarter.

Current capacity is 20m units p/a expanding to 40m by September when wrapping machine is installed. Any further expansion will be funded by the manufacturer.

Further growth will be driven by merchandise and international markets like AUS/NZ/Japan and brand recognition exists, merchandise includes animation - publishing - clothes and toys etc.

Significant growth potential and based on 40m units p/a and 30c per unit EBIT margin gives them a market cap of $168m at 17x earnings multiple is $1.21 per share. At 200m units p/a they get $5.40 per share showing the upside to the company and potential. YOW is funded for growth with $12m cash.

There are ~1.3m units in inventory which is ample supply for any near term trials.

The manufacturing facility can support up to 100m units p/a.

Management have indicated to them that they have received strong interest from numerous US retailers to trial the launch of the product in their stores and they anticipate an agreement to be completed shortly to meet the launch date.

They believe the tier one retailers to have an interest in distributing the product are Walgreens, Walmart, TESCO, KMart and Aldi etc, they also mention the 1.2B Kinder sales in Europe which is of comparable size to the US.

#####

There's a bit more in there but you get the drift, I'm sure it will come on their site soon. I look forward to hearing about the agreement to be completed shortly!!