I had a similar growth trajectory in the DCF I performed with 27% growth this FY followed by 20%, 16%, 14.4% and 12.8%.
This gave me a FY21 revenue of $123m, EBTIDA $43.5m and FCF to Equity of $19m. With a WACC discount rate of 8.5% I get a value of $5.53.
Growth seems reasonable for the domestic market given the shift towards natural products and as the brand grows in Aus it'll be more appealing to o/seas markets, particularly China.
I quite like management's patience with the Chinese expansion as this could be a good long-term play and would rather they get it right the first time rather than have frenzied buying causing massive fluctuations as we've seen recently in Blackmores.
I'd be happy to hold this stock up to $6.20 to see how the growth of the Sukin brand plays out. If no guidance or reports are released showing growth higher than that which I've forecasted, then I'd be out at that price. Up until $5.30-$5.50 I think it's a decent buy but getting risky at the $5.50 mark.
Just my thoughts. DYOR
BWX Price at posting:
$5.06 Sentiment: Buy Disclosure: Held
