Why would you short Tassals *now*?, page-806

Yes, I think this does shine some light on the sector - particularly that the salmon aquaculture assets are still valuable in the global economy despite some local ESG concerns being raised. I do not however think that we will revert to the global valuation for salmons, which are magnitudes higher than what Tassal is trading for.

The issue with Twiggy Forrest is a non-sequitor. I was of the opinion he would be the winner, but clearly at the price JBS were willing to pay he has not followed. He may never have even been that serious, and could have been taking kicking the tyres simply because they were so undervalued. The major difference with Huon vs Tassal, is that Huon is a 'turnaround' story. JBS have basically paid top-dollar for the assets, and the shareholders of Huon including the Benders have been paid out handsomely. JBS now wears the risk of being able to turn this thing around - back in FY18 and before, Huon was profitably with lower volumes (less emphasis on the ocean pens). If they go back towards that model, then there will be less salmon in the markets and higher margins for everyone. That'd be good. If they however try to push through more volume to increase operating EBITDA, well that'd be detrimental to all in the sector including Tassal.



My guess is that Tassal's salmon assets are now worth around $4 on the market. We should trend towards that as the cycle improves. The other part of the equation is the valuation of prawns. Things definitely are improving and I suspect FY21 should be a catalyst to start getting this included in the share price:



My guess for the valuation of prawns is anywhere from $1 (based on how much has been expended and the assets) to $3 (based on the market valuations of EBITDA that is generated either through salmon or prawns).



Good to see a big green candle today, GLTAH.