Valuation and Growth Prospects for CI1

Hi all, long term CI1 shareholder and first time poster here. Id thought id create this new thread to have some discussions surrounding the fair value of this company. I encourage other value investors and dedicated shareholders to do the same. Please refrain from any stupid comments that have no underlying facts to support arguments. Id thought id give my two cents on CI1 and the recent selling we have witnessed.

COMPANIES PROFITABILITY:

CI1 has only been operating for approximately two years. The stock price prior to 2018 tracks the failed mining company APAC Coal Limited. Im not 100% certain on the details, but im pretty sure Credit Intelligence purchased/took over the stock ticker (correct me if I am wrong here).
If you take the time to look at the financials of this company, they are fundamentally brilliant. In 2018 (first year of operations) the company ran at a loss of $228,191. In 2019, the company saw a net profit of $524,662. In 2020 they saw a net profit of $2,541,275. This growth rate is phenomenal, and demonstrates an effective management strategy. There are not many other penny stocks that have this level of growth and profitability.
^Heres a true screenshot of the companies revenue vs profitability ignoring APAC Coal limited.

MANAGEMENT DECISIONS SURROUNDING CAP RAISE/ DIVIDENDS / MANAGEMENTS RETURN ON CAPITAL

These two topics are frequently brought up by down-rampers. In regards to the capital raise, in no sense did this "fail". Management made a strategic decision not to go through with the 4c capital raise.
Clee Capital tried to secure a board seat in CI1 as a last minute decision. Management declined the raise on this last minute addition to the deal, and this proves that fundamentally management believe in this company enough to not be throwing board seats around, and not to be bullied into deals by larger organisations. Fundamentally this was the best move management could have made. Also with the decline of the raise, shares were not diluted, and CI1 sought to other funding options to secure the needed finance for expansion.

In regards to dividends, a lot of people are frustrated that CI1 pays dividends while they should be using the funds for expansion. In an interview, Jimmie (CEO) stated that he is trying to attract super fund investors through stable dividend payouts. Also he stated that he appreciates his share holders and also sees the dividends as a reward to loyalty. The company provides a dividend reinvestment plan, and this testifies to the fact that Jimmie is seeking loyal long term shareholders to support the companies development and growth.

One thing I would also like to point out is the return on capital % by management.
Ive scribbled out APAC Coal's management return on capital, and left the 3 from Credit Intelligence. For those of you who dont understand this, this demonstrates how much return on investment the company has received from capital it has employed in the business. These numbers are also phenomenal, and show managements effectiveness in decisions surrounding its finances.

INSIDER SELLING AT CI1

Another thing that down-rampers have continuously brought up is the fact that Jimmie gifted his wife shares, and she sold a packet, along with some selling from other management figures within the company. If you look at the ownership breakdown of the company,
51% of shares are owned by insiders. People will always have personal reasons to buy and sell shares, and management are no different. You never know exactly what circumstances are surrounding their decision to sell. The amount of insider shares that have been sold are actually so insignificant relative to the total amount insiders hold.
Biing Tan sold a significant amount of shares at 0.05. This sell was a smart move, the company was in the middle of a pump and dump (which ill go into later) and Biing sold his overpriced shares. If your shares were valued way higher than they should be, wouldn't you sell as well and look for another time to re-enter?
Russel and Jimmies wife sold smaller packets, most likely due to personal reasons.

If there was a fundamental problem with the company, we would have seen a much larger amount of selling occurring. These numbers are very insignificant and nothing to worry about at all. Jimmie has recently purchased more shares, and Jimmie, if you are reading this, please buy some more. This will assist with shareholder confidence.

YOZO, BNPL AND THE CORE BUSINESS MODEL OF CI1

The fundamental business model of this company is one I am very excited about. CI1's core business is debt restructuring. In a world with rising personal and corporate debt, the market CI1 is attempting to break into is a very large and lucrative one. Debt restructuring is a market that has long term prospects. There will always be debt in this world, and there will always be a need for assistance surrounding personal finances. CI1 has just broken into the Australian market, and I am confident that we will see a larger customer base flock to this company. The global expansion plans that this company have is also extremely exciting. In my eyes, the company is trying to position itself in the perfect position to profit off of a huge increase in global debt within the coming years. The more they can grow now, the better the position they will be in when this occurs.

In regards to YOZO, it should be clear that this is not a BNPL marketed towards the average joe, this is a BNPL marketed to small medium enterprises to help assist small businesses with financing operations. CI1 is attempting to create a one stop shop for SME's with both funding capabilities and debt restructuring services.

FEBRUARY'S CI1 SHARE PRICE PUMP AND DUMP

Now I am not 100% certain on the exact reason behind the share price increase to 13c, but I have a few speculations. Firstly, the share price was artificially inflated by an investment firm for a quick buck, or secondly, an unjustified hype around the BNPL aspect of the company. A 13c valuation for CI1 at this point in time is just ridiculous. I will go into my valuation of the company later in this post.
The rise did not begin on any announcement basis. With the rise saw an increase in media attention, and hence brought people to CI1 looking to make a quick buck. Many purchased on the way up on an unjustified hype, and got severely burnt as the stock price corrected itself. I believe intelligent investors are utilising this drop to purchase more shares by trying to justify this large decrease with false claims.

MY SHARE PRICE VALUATION OF CI1

I subscribe heavily to the Buffet/Munger approach to investing, with estimating a fair value and applying a margin of safety.


Above you see three seperate valuation methods I have used. (The third table is very optimistic, so I would not go off of this one) I have made a safe prediction that the company will grow by 20% per annum, which to be honest I see as a very very conservative number. If we take the fact that CI1 will grow by 20% per year, I estimate the share price should be somewhere around 4-5.5 cents today. Applying our margins of safety, the share price we are currently at now is the perfect entrance point for this company. If the company can pull off a triple digit growth rate this year, we should safety see the fair value of this company rise above 5.5 cents.
Analyst growth rates are very optimistic as well.

SIMPLY WALL STREETS RISK ANALYSIS REPORT

Ive seen some people post this screen shot in this forum quite a few times.
The top 3 "fails" should not be considered. Heres why. In regards to the revenue and earnings forecast, simply wall street has taken into account almost 3 years of APAC Coal limited's earnings, which hence does not reflect a true earnings growth of the company. Earnings have certainly not declined at all since the beginning of the company. In regards to the price being liquid and stable, this failed a check due to the pump and dump we saw in February. Ignoring that, the share price has remained very stable and has had decent volumes to be classed as a liquid share. In regards to the insider selling, as I have said above, there is no reason to worry about this.

SUMMARY

I bought 6 figures of this share a while back, and have subsequently bought resulting in my average price of 0.031. It is by far one of my largest holdings in my portfolio, and one I am very comfortable to have.
I decided to post my two cents of the share as I have just seen too much rubbish being posted on here surrounding the company. Too many people stating opinions with no backing facts what so ever. I care about this company enough to be frustrated seeing the share price being unjustifiably low.

Now I am not 100% certain of this, but like many others I have a suspicion the share price is being manipulated in some form. Here is why I believe this is the case. First and most obviously is this non sense negativity on this investing forum. I believe we are seeing some sort of corporation or group trying to flush out retail investors to fill their pockets with as much of this stock as possible before the share price rises. I believe we have paid manipulators such as Rob88 and xtremelivin who are attempting to spread fear throughout holders on these forums. Just ask yourself, what are these people trying to achieve by berating this stock? They post daily nonsense and repeat the same few arguments over and over and over.
Secondly, this stock is trading near its floor. The share is so far under its fair value at this point, and there is no justifiable reason as to why it should be like this. The only logical answer is either fear, or a lack of interest in the stock.
Thirdly, we have seen some ridiculous price targets being stated for this company, on and off of this forum. Ive heard people state that the company has a resistance at 2.6, and then we can expect 2c if it falls under that. The company has literally increased revenues and profits dramatically over the last 2 and a bit years, and we are somehow trading the share at literally near its min price? That just makes no sense to me.
https://www.griproom.com/fun/10-signs-your-stock-is-being-manipulated
^This is a good read if anyone wants to do some more research into market manipulation.

I consider this company a long term hold of mine, and I strongly believe in the management capabilities and future prospects. I am loading up as much shares as I possibly can in this company (That sits in my risk tolerance of course). At under 3c, this company is an amazing bargain, and most likely one of the most undervalued stocks on the ASX.

THIS IS NOT FINANCIAL ADVICE, THIS IS MY OPINION FOR WHAT IT IS WORTH. PLEASE DO YOUR OWN RESEARCH.