$AABB AABB has a shockingly clean balance sheet #2 first i read $AABB Asia Broadband: A Literal Gold Mine Dec. 20, 2020 9:39 AM ET|About: Asia Broadband, Inc. (AABB) Summary Asia Broadband has achieved impressive success in a short amount of time.
Their unique vertically-integrated approach, in conjunction with secular tailwinds, will be tailwinds to help them build on recent success.
My analysis suggests there is significant share appreciation potential over a 1-3 year horizon.
Asia Broadband is traded OTC, and as such carries risk. Please do your own due diligence.
Asia Broadband (OTCPK:AABB), through its wholly owned subsidiary Asia Metals, is focused on the production, supply, and sale of precious and base metals primarily to Asian markets.
For a junior miner AABB has a shockingly clean balance sheet, and it has managed to become quite profitable in the past year.
They have achieved impressive success in a relatively short amount of time, and my analysis suggests there is significant upside potential over the next 1-3 years.
Let us begin by reviewing some of AABB’s key financial metrics:
Moreover, AABB has gone from net losses in 2016 – 2018 to turning a profit in 2019 and 2020.
Take note, brokered mineral sales have eased off because they have only reported data for the nine months through September 2020; this does not include Q4!
Through September of 2020 AABB has recognized $11 Million in gross profits, and they project full year gross profits of $14MM.
While the profitable history is limited, 2019 profit margin was 79.5%, and 2020 YTD is 77%; applying the lesser margin to projected profits would yield Net Income of $10,780,000 for FY2020.
With 1.13 Billion shares outstanding and 2.50 Billion shares authorized, the projected resulted would hence be $0.01 EPS—$0.005 if wholly diluted. With a current PPS of only $0.0045 (as of 12/18/2020 close) that is a P/E multiple of 0.45x the outstanding shares.
It is worth mentioning AABB has recorded a YTD non-cash D&A expense of $1.325 Million, which, if added back to net income, would represent a +13% increase.
Now, I am not a fan of straight-line assumptions, and I believe it is prudent to make conservative estimates when evaluating a fair PPS.
Let us reduce the YTD 77% profit margin by -15% and assume the actual margin when reported is closer to 65%.
That would still produce Net Income of $9.1 Million and EPS of $0.0081 (0.00405 if wholly diluted), resulting in a current P/E multiple of 0.55x—far too low in my opinion.
Applying a conservative price multiple of 8x earnings would yield a target price of $0.0324 - .0648; that would be a 7.2x – 14.4x upside on its own.
It is worth mentioning one of the reasons AABB has been able to keep a clean balance sheet is by chronically diluting ownership through equity issuance and convertible notes:
In my opinion this serves shareholders well; not only has this permitted AABB to finance projects with limited interest expense,
but it places financiers in a position whereby they have a vested interest in maintaining the young operation as a result of their own sunk costs.
Moreover, there are compelling reasons not to abandon ship:
In addition to the demonstrated sales efficiency over the past 4 years, the technical aspect of the mining operation has been remarkably successful.
According to Investopedia, World Gold Council categorizes 8-10 grams per ton as a high-quality mining location. In a June 2020 press release,
AABB’s final assay reported drill results as significant as 11.6 – 13.2 grams per ton.
The true value in AABB, though, is in their vertically integrated approach. Not only does AABB conduct exploration and mining operations, but they conduct sales operations and, as the name would suggest, they sell direct primarily to Asian markets.
Asian markets are the world’s largest for physical Gold and precious metals;
India is the largest market globally for jewelry-related Gold demand, and it is well-documented that China has been aggressively accumulating Gold reserves over the past decade:
It is also widely-thought that China would like greater economic independence from the USD, and the best way to enhance confidence in the Renmibi is via Gold backing.
Moreover, China’s central bank—and central banks globally—have increasingly expressed affinity for digital currencies. In my opinion, digital currencies backed by fiat currencies serve no purpose on their own, and truthfully there is no value in replacing existing currencies with a digital substitute alone.
An argument goes that creation of a digital currency can be limited to a predetermined supply, and as such it mimics the scarcity of Gold.
I disagree with this assessment, because there is nothing to prevent the predetermined supply from later being augmented;
believing otherwise is predicated on faith in central banks, of which I have none.
Enter AABB, who, in the last week and half, officially engaged a developer to create a branded Gold-backed cryptocurrency coin.
This is particularly interesting because, while Gold-backed cryptos exist, to my knowledge the developers/sponsors have only been precious metal dealers—not the miners.
The vertical integration has enormous value here because AABB quite literally has direct influence over the money supply, indirectly becoming a pseudo-central bank—a concept I outlined two months ago i n a Seeking Alpha blog entry.
From a purely narrative perspective, one can see how the puzzle pieces fit together here for achieving rapid adaptation of a flagship coin in their respective markets, achieving multiple revenue streams, or pursuing licensing agreements and royalties.
Now, let us do some guesswork and conjecture to see how this could apply to AABB’s share price:
At present, Gold trades just shy of $2,000 per ounce-- $1,886.80 to be exact.
Given the expansion of global M2 and the extent of negative real rates I do not think $2,500 in the next year is unreasonable.
I do not think $3,000 is unreasonable in one year even.
But, in the interest of prudence, let us start with $2,500 in one year’s time—a 25% increase.
A 20% year-over-year increase in sales is not unreasonable for a company in high-growth mode—in fact, 2019 YoY was 77%, and 2020 projected is 108%-- so let us say AABB organically increases gross profit in 2021 from $14 Million to $16.8 Million, and let us say as a function of Gold increasing 25% gross profit is increased another 11%.
That results in projected gross profit of $18.648 Million in 2021. If the same 65% profit margin assumption is applied the projected Net Income becomes $12.121 Million.
Now, AABB is working with Waters CPA group to produce audited financial statements for OTCQB up listing compliance.
This would undoubtedly improve confidence and visibility—an ideal time for an equity raise.
Let us assume AABB issues all authorized shares (2.5 Billion), fully-diluting existing shareholders, and let us say they authorize another 500 Million to boot.
Fully-diluted EPS would hence be $0.00404 – 0.00485.
Now, if Gold prices really do go up 25% and if AABB successfully up lists, I would be comfortable increasing the earnings multiple to 11x Net Income, which delivers a price target of $0.044 – 0.053, and is approximately a 10-12x improvement on today’s PPS.
With no dilution, PT is $0.1180—a 26x multiple on today’s PPS.
This analysis ignores that AABB is a micro cap stock, and mania bidding plus structural tailwinds afforded by low liquidity and high short interest could move the price stratospherically.
If Gold were actually to go up 50%, a real possibility in my view, using the same assumptions we get price targets ranging from $0.059 – 0.1297
and multiples over current price ranging from 10.86x – 28.82x, and a resultant market cap of $146.55 Million.
Finally, we can evaluate some “best case” scenarios that assume AABB’s recent stated financials are indeed indicative of what an investor may expect the company to repeat over the next 1-2 years.
Recall I made conservative assumptions about growth rates and profit margins (20% and 65% respectively), but let us instead take recent financial statements and apply those to forward earnings.
Asia Broadband’s YoY gross profit changes from 2017 – 2020 are 1,149%, 1,272%, 77%, and 108% respectively.
If we assume 80% YoY gross profit growth, 75% profit margin, and 11% adjustment for a 25% increase in gold price, we get the following figures:
Or, if we assume AABB’s growth from 2018 – 2020 represents a trend, we could apply a 115% organic growth rate and come up with the following:
This also assumes no success with Gold-backed cryptocurrency, either, which I do not have an objective way to model into the projections.
I suppose at the least there could be free cash flow generated from an ICO, and conceivably one could envision augmented access to funding markets if third parties suddenly have a vested interest in scaling the use of the currency.
Remember, the CBOE crypto indexes go live next year so this is not an unfeasible outcome. However, again, I have no objective way to model this, so I am excluding success of this undertaking.
These are all responsible assumptions and I believe they are conservative and tethered to reality.
Investors and penny stocks are anything but, so you may consider adding 2-3x these projections for possible speculative outcomes.
Now, the bear case:
In brief, as stated, this is a penny stock.
As such, there is little transparency, and this is a small company.
Asia Broadband shares a healthy amount of press releases, and while that may be interpreted as transparency on the part of management,
it could also be interpreted as pumping up a tiny stock on unsuspecting investors.
Asia Broadband is based in Nevada, they primarily distribute in Asia,
they have more than one web domain, and they are jumping on the crypto fad which can grab the attention of unsophisticated investors.
Not to mention, precious metal markets can be dubious in of themselves.
This confluence of factors reeks of fraud potential.
AABB has deeply negative free cash flow, and share dilution could accelerate beyond my assumptions. They could fail to secure additional financing altogether and be forced to abandon any or all projects.
You do not invest in penny stocks because they lack risk.
You invest—gamble, really—because you know there is risk involved and you may be compensated proportionally for accepting it.
As such, I assume 0% recovery should worst case scenarios play out.
Those are the terms of the deal you must make with yourself if you engage in this type of opportunity.
I am long approximately 2.6 Million shares of AABB with an average basis of $0.0053.
01-14-2021 $AABB RECENTLY SOLD PROPERTY TO AABB - Asia Metals Completes $82 Million Sale Of Guerrero Gold Belt Mine And Facilities In Mexico To Joint Venture Partner Press Release | 01/14/2021 $52mil cash $30mil. in gold bullion CASH ON HAND AFTER BUYOUT = $108 MILLION, UNHEARD OF FOR OTC PINK SHEET COMPANY. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=160939132
7 REASON FOR $AABB one ah recent property sale @ $52mil. cash & 30mil in gold bullion
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=160527624 BUYOUT ????? Final stages of bringing the Gold Backed Crypto currency offering. We are in a crypto currency boom and the great thing is that it is backed by Gold which has huge value and not FIAT currency whose value is reducing with time. This is really HUGE, and this makes AAB not only a Gold mining company but also a Crypto currency company, that can cause the stock to soar to huge heights. The PR is in the link below:
$ARCS 01-16-2021 STILL WAITING FOR COMPANY INSERTION https://investorshub.advfn.com/Arcis-Resources-Corporation-ARCS-524/ in custodianship COMPANY TO BE CANNABIS [ONE OF DA LARGEST TO INSERT/\ update 01-16-2021 web site still pending still trading & no sec investigation no recent news.
Coin Citadel (OTC:CCTL), a holding company, is closing in on acquiring over $750,000 in Bitcoins. We are diligently working on finalizing a transaction for 1,675 Bitcoins which will bring our Bitcoin assets up to 2,251 Bitcoins and closer to a value of one million dollars USD.
What is Cryptocurrency – Click Here https://cryptoshib.com/bitcointalk-forum/ Once there is moderate knowledge about Bitcoins and cryptocurrency – Bitcointalk.org will be a great place to go.
$NBRI Given the close proximity of the Zippa Mountain property to these gold producing areas, a new discovery of gold around Zippa Mountain is within the realm of possibility once wollastonite extraction operations commence and further exploration programs are expanded.
adjacent claim near Olivine Mountain yielded assays as high as 26.94 and 15.97 grams per tonne platinum from samples taken within 100 metres of the Company?s claim boundary (AR 28750). The samples had been collected from an extension of the platiniferous dunite rocks that extend south from Olivine Mountain.
$NBRI Given the close proximity of the Zippa Mountain property to these gold producing areas, a new discovery of gold around Zippa Mountain is within the realm of possibility once wollastonite extraction operations commence and further exploration programs are expanded.
$PFWIQ 01-16-2021 STILL WAITING FOR COMPANY INSERTION https://investorshub.advfn.com/Petrone-Worldwide-Inc-PFWIQ-10251/ in custodianship $PFWIQ Custodianship was Awarded to Custodian OWNER Ventures LLC, DAVID LAZAR APPOINTED CEO [as David Lazar was appointed as the company’s Chief Executive Officer,]
President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Board of Directors: Quote:
On March 25, 2020, as a result of a custodianship in Clark County, Nevada, Case Number: A-20-810012-B, Custodian Ventures LLC (“Custodian”) was appointed custodian of Petrone Worldwide, Inc. (the “Company”). 72% BUY RATING https://www.barchart.com/stocks/quotes/PFWIQ/opinion 01-16-2021 NO RECENT UPDATE
Sonnet BioTherapeutics Announces the Completion of a Successful Non-Human Primate Study of SON-1010 Mon, November 30, 2020, 6:30 AM MST Compared to recombinant human IL-12, SON-1010 demonstrated an enhanced pharmacokinetic (PK) profile that was similar to IgG antibodies
SON-1010 continues to be well tolerated at doses far exceeding levels expected in potential future clinical trials, without producing detectable cytokine imbalances
Analysis of Interferon-? levels, a key biomarker of antitumor activity, suggest potent on-target pharmacodynamic (PD) effects
RE JUST IN: $SONN 3 Penny Stocks To Watch After Trump's Emergency Plasma Authorization
Convalescent Plasma Stocks To Watch Penny stocks shift in an instant and that could be the case for a few companies this week.
Over the weekend, U.S. President Donald Trump announced the emergency authorization of convalescent plasma for COVID-19.
https://www.sonnetbio.com/news-media/press-releases Nov 30, 2020 8:30am EST Sonnet BioTherapeutics Announces the Completion of a Successful Non-Human Primate Study of SON-1010 Sep 01, 2020 8:30am EDT Sonnet Announces New Preclinical Data for SON-1010 (Interleukin 12-F(H)AB)
$SSOK 01-16-021 STILL WAITING FOR UPLISTING https://investorshub.advfn.com/Sunstock-Inc-SSOK-32694/ uplisting @ any given day DIGITAL CURRENCY https://investorshub.advfn.com/boards/read_msg.aspx?message_id=160442773 $SSOK FOR OTCQB for uplisting,[QUALIFICATIONS]for $SSOK Meet minimum bid price test of $0.01 Eligibility Requirements U.S. companies must have audited annual financials by a PCAOB auditor. (Tier 2 Regulation A Companies are exempt from requirement to use a PCAOB auditor for their initial audit) Meet minimum bid price test of $0.01 01-16-2021 for uplisting
Our goal is for Service Team Inc to be listed on the OTCQB market by the 3rd quarter of 2021. This is a lofty goal, but we have a newfound direction and leadership that can make this goal a reality.
Penny traders believe that Market Makers (MMM) Have signals for sure !!!!! & will "signal" moves in advance buy using small amounts of buys or sells as "signals".
The "signals" are such a small amount of shares (worth no more than 5 or 10 dollars) that no trader would have paid a commission that costs more than the amount of shares bought.
The "signals" are from one MM to another.
100 - I need shares.
200 - I need shares badly, but do not take the stock down.
300 - Take the price down so I can load shares
400 - Keep trading it sideways.
500 - Gap the stock.
This gap can be either up or down, depending on the direction of the 500 signal. ====================================================== 505 - I am short on shares 600 - Means provide resistance 900 - Means let the stock float 911 - Pending News/Press Release On The Way 1000 - Don't let it run 2100 - Let it run
ADDING; List Of Market Maker Signals 1. 100 - I need Shares. 2. 200 - I need Shares badly but do not take the stock down. 3. 300 - Take (or I am taking) the stock down at least 30% so I can load shares. 4. 400 - Keep trading it sideways. 5. 500 - Gap the stock. Gap can be up or down, depending on direction of 500 signal.
6. 505 - I am short on shares 7. 600 - Apply resistance at the ASK to keep the price from increasing. 8. 700 - Move the price up. 9. 777 - Also recognized as a signal to move the price up. 10. 800 - Prepare for an increase in trading volume.
11. 900 - Allow the stock to float and trade freely. 12. 911 - Pending News/Press Release On The Way 13. 1000 - Don't let it run 14. 2100 - Let it run
ADDITIONAL MMM BOY'S MANIPULATION OTC MARKET MAKER SPEAKS OUT….https://www.stockthoughts2.com/otc-market-maker-speaks-out/ By stockthoughts2 Posted April 4, 2017 In News I was an OTC MM for about 10 years ending in the late 80’s. Since then I have been strictly an investor. Since I have not been that up to date in MM rules I will only make statements that I feel fairly confident are still accurate regarding these activities. By and large most MM don’t have a clue nor do they care to learn, about the fundamentals of the stocks they trade.
They just try to make orderly markets. When dealing with BB stocks it is very easy for a MM to get trapped into being short in dealing in a fast moving market. Reason being; most of the MM’s in this stock are what are called “wholesalers” this means they don’t have retail brokers “working” the stocks.
So they have to rely on what’s known as the “call” from larger retail houses. If a “Big” retail firm like an E-trade calls up a market maker to purchase say 5,000 shares of a stock, they expect to get an “execution” from that market maker. If he turns them down, or only gives a partial then the “Big” firm will go to another MM.
If this second MM “fills the order” then that “Big” firm has a moral obligation to continue to give future “business” in that stock to that MM who performed (his life blood). This will go on until he “fails” to perform and so on.
Market Data 
Markets 
AI
