Dutch: your last 2 posts (the one about the divi and this one) are very informative, and really show conviction and analytical strength despite the challenging circumstances. Keep up the good work.
I think your assumption of 80% growth w/o dilution vs 100% with dilution is however too generous and misplaced.
Dilution in this case is the MAIN reason why this Company can/will grow its eps 100% year after year. Considering its non-existing cash reserves, it would not be able to grow in any other way than organically. This means growth by slowly expanding capacity year after year at existing facilities via enhanced efficiency (like rotational stocking to reduce the fattening time) combined with buying/selling at better prices... But without the extra leverage in the form of the overblown capex which is partially paid for by issuing new shares to the involved partners, it would have no means of building more fish and cattle farms every year, or owning more equity in the JV's, or expanding into lucrative retail, marketing and trading fields that allow this company to grow exponentially in coming years.
This is best described by Solomon in last CC:
For instance if the Company did not and will not dedicate to the said Capital Expenditure, we could only guess that our natural annual revenue growth rate might progressively increasing at about 10 to 15% with similar growth rate for our EPS
The 3 main drivers of this company's exponential growth , at least wrt its main activities of growing fish and cattle in APM farms, have been discussed here before:
- more capacity per farm
- more farms per year
- more ownership per farm
w/o dilution it may grow organically via the first mechanism, namely increasing the production capacity at each farm as discussed above. But there's little chance it can invest in building more farms (mechanism #2) and buying more equity in the JV (mechanism #3). As Treit and myself have discussed before, these 3 drivers combine to produce geometric growth which in this case results in 100%+ growth of top and bottom line.
AI
