Great points mgm1a, thank you.I realise many of my assumptions...

Great points mgm1a, thank you.

I realise many of my assumptions are erroneous, but I deliberately erred on the high side given there are always hidden costs which arrive unexpectedly in any business.
This model builds in approx US$70million of such "unexpected costs" as a buffer, if you will.

As I noted, the aim of my calculation was not to arrive at a bullet-proof (or professional analyst's valuation), but rather just to pick through all the numbers available and see whether RED was fairly valued at current levels or not.

I like your NPV numbers and agree 10% discount rate also very (i.e. too) conservative, so a starting point of 27cents seems a good basis. Interesting how 2 sets of calculations, using two sets of assumptions and 2 methodologies should arrive at a similar answer. Gives me even more confidence.

My only caveat is that this isn't the most liquid of stocks and with 61% of shares in the hands of the top 10 shareholders, it is one highly open to manipulation. Therefore, it doesn't surprise me that it has seen volatile days and the current share price is not reflecting what we perceive its value to be.

If I am going to hold RED, I will be sure I can afford to be patient and hold for several months at least, not get sucked into watching the day-to-day price movements.

With the absence of any news to the contrary, I believe the fundamentals support a higher price. However, in my opinion, shares today are priced using technical measures and this can result in major divergence from what the fundamentals suggest, and for extended periods of time. These investment banks and "sophisticated" investors are a ruthless bunch.

Good luck to all in any event.