What’s PLS worth?
As per my post on the daily SP chatter string, I’ve started a new string for valuation/analysis/critique. Hopefully this string can be more dedicated to fundamental analysis of PLS rather than wild speculation.
IMO there’s a lot I like PLS … it’s a true Tier 1 asset (large asset, projected to be at sharp end for cost), leveraged to growth of EV and I also like the relationship/options with Posco. However, being in commissioning/construction mode and producing a new mineral with volatile pricing – it’s at the high end of the risk spectrum and SP volitivity. So, what’s it worth today?
Market Analysts:
- ThompsonReuters consensus 12 month SP target is $1.02 across 7 analysts.
- High$1.20 (unchanged since Aug18); Low $0.70.
- 5 of the 7 analysts have downgraded the SP target since start Apr19
Bringing those 12 month targets back to SP as of today, the analysts have an averagevalue of ~90c.
I prefer to try to understand the range of values based on key risks. IMO the biggest of these are:
- SP6 price received
- SP6 yield (driving both costs/dmt and production tonnes)
- Time frame for existing/new production to achieve design performance
Potential CAPEX blowouts and other OPEX are minor risks IMO (ie. I think these can be well managed by KB and his team). On the upside, Posco JV and Stage 3 could add value, but as I said on the other string, there are too few details to estimate value IMO. If others have methods of valuing these (as opposed to just speculating what they’re worth) – perhaps they can add them to the string.
I’ve therefore created a matrix of values based on:
- Operating cost basis uses latest Stage 3 advice (US$290/t at 75% yield). This is much higher than the Stage 1 LOM figure (US$207/t) but PLS have since adjusted down the yield and possibly other components. Therefore, US$290 may be a tad conservative (but Stage 1 Feas too bullish).
- CashOPEX components affected by yield have been scaled (ie. mining &processing) those unaffected left as per Stage 3 advice (eg. Royalties, nativetitle)
- Simple 10x Net Operating Cash Flow valuation model at time of performance metric.
- Future performance discounted back to Jun19 at 12%pa.
Results below. I’ve included the Stage 1 only numbers to illustrate the importance of getting to design yield (15-20c worth in SP terms). Seems to me the analysts (on average) are projecting either much lower SP6 prices than PLS is currently achieving and/or a lack of confidence in PLS achieving design yield.
As a reference point, PLS based their Stage 1 Feasibility Study on a long term SP6 price of onlyUS$537/t.
Have others done similar price/yield/value analysis? Thoughts?
- Forums
- ASX - By Stock
- What's PLS worth?
What’s PLS worth?As per my post on the daily SP chatter string,...
-
- There are more pages in this discussion • 194 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add PLS (ASX) to my watchlist
|
|||||
Last
$2.41 |
Change
-0.170(6.59%) |
Mkt cap ! $7.257B |
Open | High | Low | Value | Volume |
$2.57 | $2.60 | $2.41 | $64.35M | 25.99M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
5 | 123970 | $2.41 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$2.42 | 15148 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 19000 | 2.410 |
61 | 160822 | 2.400 |
1 | 418 | 2.390 |
8 | 28845 | 2.380 |
2 | 15000 | 2.370 |
Price($) | Vol. | No. |
---|---|---|
2.420 | 13082 | 2 |
2.430 | 15000 | 2 |
2.440 | 22738 | 3 |
2.450 | 22100 | 3 |
2.470 | 12500 | 2 |
Last trade - 16.10pm 06/09/2024 (20 minute delay) ? |
Featured News
PLS (ASX) Chart |