Shagang Offtake, page-139

I have done some valuation work in my career.

without spending too much time on whether it's 30m or 20 m or 50m per annum EBIT impact of the apparent price discount, a 30m EBIT impact will have about 210m valuation impact. just saying

furthermore, at the core of the debate about why it might be undervalued will be the 'shallow' transparency as to inter-company relationship/s. were it not for the experts report, a number of details would not have been revealed, a fact which I think the market has discounted it valuation of GRR for some time.

lastly, i think there is interplay between these transfer prices and approach to dividends. if shagang is getting 'benefit' by discount raw material, then there is less incentive by a major shareholder to receive franked dividends ... I doubt franking credits in Aus are worth too much in China so the value of those dividends does diminish somewhat. hence, i doubt much excitement for 10% returns in the form of dividends quite beats a 10% input price advantage...

have a good day.