At risk of enraging 2ic (although I do look forward to his response).
SFX $155m (346m shares on issue x $0.45) versus STA $655m (1.245bn shares on issue x $0.525)
STA price one year ago was $0.19 with market valuation of $200m - now up 225% to $655m
If SFX follows same development uplift in market capitalisation over next 12 months it will be valued at over $500m or $1.45 per share
- Both projects in Western Australia
- Both have very similar attributable post-tax Net Present Values (arguably SFX has used far more conservative assumptions ie. AUD/USD rate 75c vs STA at 70c, the difference of which could add an additional $250m+ to Thunderbird's NPV)
- Could therefore reasonably justify same market value when both in production, in which case SFX would have a share price of $1.90 based on STA's current market cap of $655m and SFX shares on issue of just 346 million shares.
So why such a big difference in current company values?
Someone recently suggested to me the incredible disparity in the market's valuation is potentially explained (but not justified) by the following factors:
- STA announced Coburn is now ~90% complete with first production expected next quarter
- SFX announced Thunderbird is now ~40% complete with production expected Q4 2023/Q1 2024 (so roughly 12 months after STA)
- STA perceived to be less reliant on Chinese customers/partner (although being reliant on Chinese never seemed to be an issue for Andrew Forrest and Fortescue and his ability to collect multi-billion dollar dividend cheques each year)
- SFX have $40m cash but after making the final $36m equity contribution to KMS JV will be left with $4m and perceived to be wanting to strengthen their own balance sheet (important to remember that cost structure of SFX going forward will be minimal with KMS wearing Thunderbird project costs)
- SFX waiting to announce completion of final documentation with Orion for US$110m facility expected in coming weeks
- SFX yet to announce FID also expected in coming weeks
- SFX does not have the same broker research coverage from the likes of Shaw & Partners, Fosters Stockbroking, Euroz Hartleys, Morgans Stockbroking due to not needing to raise a large amount of equity anymore to fund project completion
Here's an interesting performance comparison chart to leave you all with. STA vs SFX
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- ASX - By Stock
- SFX
- SFX trading at a less than 25% of the market value of STA
SFX trading at a less than 25% of the market value of STA
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Last
31.0¢ |
Change
0.010(3.33%) |
Mkt cap ! $122.3M |
Open | High | Low | Value | Volume |
31.0¢ | 31.5¢ | 30.0¢ | $59.78K | 192.5K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
5 | 79749 | 30.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
32.0¢ | 50000 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
4 | 74749 | 0.300 |
1 | 1700 | 0.295 |
1 | 30000 | 0.290 |
1 | 2368 | 0.285 |
2 | 6000 | 0.280 |
Price($) | Vol. | No. |
---|---|---|
0.320 | 50000 | 1 |
0.325 | 7814 | 1 |
0.340 | 14705 | 1 |
0.370 | 25000 | 1 |
0.385 | 77741 | 1 |
Last trade - 15.32pm 23/08/2024 (20 minute delay) ? |
SFX (ASX) Chart |
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