Some more DD notes:
* About 50 farmers are in the Pilot stage - one of them upped his order.
* Pilot farmers use the product on small plots (one to several hectares ~ Hectare = 10 Duman).
* While the building plan on the Most recent investor Dec estimates the Capex for Phase 1 at ~3MillUSD, in practice, 600KUSD Capex was enough to build a 45 ton per hour production facility (~280K ton production). Phase one is 600K ton production. Now, take into account that expansion is always cheaper than initial build up due to the fact that the first development includes some one-time expenses such as roads and general facilities that don't need to be rebuilt in an expansion. So - this leaves us with a much cheaper estimation of the real cost of Phase 1 construction and an Idea as to management's execution and conservatism in estimating costs - all great news to investors.
* we believe the cost per tone in the company slide deck is very generous and allows for some cost slippage and errors, and thus turned somewhat less critical of the actual profit margin the company provides.
* rough estimations (before deep check and model) lead us to believe the business will BE at about 100 Mill Tone, probably CF positive earlier. We would believe investors will push valuations much higher well before this point, as some very smart investors have quietly put their attention on the business and are tracking its progress. Watch XPEL PPS meteoric 300% rise over 4 months once the fundamentals materialize.
*Also, management is on the record with distributing excess cash to investors "ASAP".
After contacting management, we are dilling down our risk rating a notch, and we will be closely waiting for signs of Farmer order pickup.
Subject to acknowledging the thesis still needs to prove itself (farmers acceptance) - is far from a sure thing (as to happening at all, in the expected scale or in the expected time frame), placing a small bet to secure initial good entry prices is a smart thing at this time (0.5-0.7 CAD).
Time will tell.
Do your own DD - management is pretty accessible.
