What is going on?

From media statements, investor days, reports to the ASX and so on, this is what we know:

1. Phase 1 is 1020 hectares of ponds
2. The revenue from phase 1 is going to pay for the rest of the build
3. Full build-out is 10,000 hectares of ponds and is expected to cost a total of $2bln
4. Phase 1 is expected to cost about 15% of the entire project ($300mln)
5. The company intends to hold about 70% of the completed project
6. Full build-out will produce about $700mln EBITA each year (about $490mln attributable to SFG)
7. Therefore the company will get about $490mln EBITA of the completed project
8. Today there is about 1,400 million shares outstanding, about 130 million options outstanding
9. The off-take partners/investors are expected to buy about 30% of the project itself - with the money being used to build the project
10. The company intends for PSD to complete by 2020/2021

So now it's time to do some scenario analysis and see how we go.

	Column 1	Column 2	Column 3	Column 4
0		Optimistic	Likely	Conservative
1	Completed PSD EBITA (projected)	$700mln	$600mln	$500mln
2	Optimistic PE 12:1	$8.4bln	$7.2bln	$6bln
3	Realistic PE 8:1	$5.6bln	$4.8bln	$4bln
4	Pessimistic PE 4:1	$2.8bln	$2.4bln	$2bln

For my purposes, I've assumed that the company's revenue projections for PSD are optimistic. I've found a range of PE for Australian agribusinesses.  This gives us an enterprise value of $2bln to $8.4bln for project sea dragon.

The company is intending to own 70% of PSD going forward.  But I'm not so sure, so let's assume that PSD is the company's only asset and what this would mean for SFG's value going forward:

	Column 1	Column 2	Column 3	Column 4
0		70% stake	60% stake	50% stake
1	Optimistic Optimistic	$5.88bln	$5bln	$4.2bln
2	Realistic Likely	$3.4bln	$2.9bln	$2.4bln
3	Pessimistic Conservative	$1.4bln	$1.2bln	$1bln

This would value SFG between $1bln and $6bln.

If you include options, there are currently about 1.6bln shares outstanding, let's assume there will be another capital round, taking it an even 2bln shares outstanding, and we have a long-term share price between 50 cents, and $2.94

If completed, I believe we're likely to see SFG worth as a company around $4bln when PSD is completed - I have nothing to base that on, but a bunch of comparisons.  The x-factor to me is the capital structure going forward - that's why my target price is around $1.50 to $2 per share. (thanks to my own financial circumstances, I'd be obliged to diversify around that share-price to "risk off").

I am at a loss to explain the price movements over the past few days - but let's look at volume.

Our "normal" days tend to be around 600k-800k shares changing hands.  Our "big" days are about 1.5-1.8mln shares changing hands, Tuesday nearly 4 million shares changed hand - we have a day like this once every six months. Today has already done 1.6mln.

Is someone shaking the tree to try and pick up bargains?  Or, is it more likely that they're selling huge volume, buying half the volume back to push the price back up, and then sell hard again?  Honestly I cannot work it out.

I'm pretty sure that in a couple of months, the company will announce that it has started construction.