I think that SK-II became a billion dollar brand in 2012, it may be a $2b brand now ? One product making US$465m would be an outstanding result but in my opinion highly unlikely.
Ok a few things:
Since 2012 P&G divested many of its brands and products to concentrate on its highest earners
In the last 6 months of last year SKII sales grew by 50% in China - as China wealth increases so does the sales and revenue streams of these types of products
In 2016 alone SKII posted double digit sales growth
Reports this year single out SKII as having been the primary driver of revenue growth in their cosmetic sector
OBJ are front and centre in product involvement with SKII. Remember that $US465mill figure was used to base a $15mil revenue stream for OBJ. I suggested we look at what's required for a $5mil earnings figure. So is US$150mill a reasonable revenue stream for one of the best selling SKII products? I say why not. Of course there are too many unknowns to accurately gauge including what the actually royalty percentage is, is the royalty based on cream sales or device sales only etc etc but to me if you couldn't receive more than $5mil out of sales of a product that sells $100s of millions dollars worth, then why would you even bother? I have more confidence in the business acumen of OBJ management than that.
Finally, why would you think up a share performance milestone figure of $20mil revenues if you didn't think you could get $5mill minimum per product? Imo these revenue figures will prove correct, the only thing management got wrong was their timing on when this will happen - and therefore they will miss out.
OBJ Price at posting:
4.6¢ Sentiment: None Disclosure: Held
(20min delay)