Hi pman, are you using a PE ratio of 30? Some will say this is...

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maglincer

5,454 Posts.

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19/09/17

23:06

Post #: 27328758
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Originally posted by Pman ↑

Not expecting massive volumes (depending on what that means).

Sk2 under my analysis shows the top 6 products sell about 3 to 4 million units.
I expect about 1m units to be sold per product annually as they are not integrated. (does not include the wand)
The more products the more revenue

Olay though has more volume has lower royalty and should be able to deliver similar total royalties.

so for simplicity sake 1 product equals 1m per year. Sure the volume drops in following years but that is more than offset by more and more products.

5 to 6 million justifies a 4 to 6c share price. We are in a hairs width with 4 products and cash positive. As each product comes on line the revenue falls to the bottom line. Every million after that will justify 2c to the share price under current expenditure.

So given they can spit out 4 products in one year with no integrated products yet, 2nd platform which in my view will be a rehash of smarter products there is a lot of quick wins to come. For me once we get a integrated lid to the best sellers you are talking 3m+ unit sales not just 1m, this is the money product for me and when the shareprice will see 5c increase justification above its current position.

Time will tell how close my calcs will be and why I stay invested even though current events.

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Hi pman, are you using a PE ratio of 30? Some will say this is generous (like hopeful), I disagree. To go from almost nothing where we are now with the low cash burn that we have to 5-6 million in a year (most of that profit) probably 10m+ the year after. Imo OBJ deserves a PE higher than that. Compare OBJ to similar companies on the ASX they all have higher PE ratios. If we hit 6m revenue total as you say could happen that would be 300% revenue growth (higher if you don't include the R&D rebate) which you don't see with companies with a PE of 30. Once the market finally sees the revenue coming in it will rerate imo.

OBJ Price at posting: 4.3¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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