Snow,
As an addendum to my last post, 2012 earnings could be WAY WAY higher than my last post, which made the "conservative" case.
In an earlier post I pegged easily achievable 2011 fish revenues of $60m, plausibly $100M.
As Strindberg pointed out, he thought $60M was way too low. If previous guidance of 8 new farms in 2012 vs. 4 in 2011 hold, then construction, consulting, module fees figure to increase 100%, maybe more depending on the size of the farms, and economies of scale. )I used 75% total business growth in the last post). We now know that the farms are expandable, so less sales/new partners are required to garner new revenues.
Also, quite significantly, part of SIAF's 2011 capital plan calls for accelerated equity participation in the fish sales. VERY important for two reasons:
1) makes getting new fish farm partners much easier, as less capital is required of them; also, as the demo farm(s) show success (sales starting in July), selling partners also faciitated
2) they will derive accelerated revenues/earnings from fish sales as they kick in.
Let's look at fish sales. In 2011 they will have a percentage equity (25%, I think, but not sure) for half a year for one farm. In 2012, they will have closer to 50% equity interest in sales for 3/4 year for 5 farms !! That's an increase of 15 times !!
Now. let's think about spinning off the fish business -- issuing say 25% of total new shares -- to the Hong Kong exchange for a business with $100M+ revenue 60% gross margins that's demonstrated 500% +/- growth over each of two years, and projected to grow another, say 50% - 75% in 2013.
Any reason that business couldn't well be valued in the $500M range?
AI
