Bisichi Share Discussion Threads

[bozzy_s] 03/3/2022 15:54

^ Absolutely no chance callumross! I've been waiting 10+ years for them to become shareholder-friendly. It ain't gonna happen under this regime.

Hopefully eventually the poison will be removed from management, as happened at TND recently, and the shares will quadruple or more. Just takes the resignation / ousting of existing board, and replaced with proper plc directors.

[callumross] 03/3/2022 15:50

Surely, for all the concerns re corporate governance this one should be way, way higher than this. Wonder if the company will make a trading statement re current trading, in view of these exceptional prices.

[tigerbythetail] 03/3/2022 15:29

Hi Bozzy!
Yes, Richard's Bay coal (and all coal worldwide) spiking to unheard of heights.
Let's hope that Bisi can make some sales at these prices. Even a couple of week's worth of sales would make them a huge amount of money relative to their market cap.
On a more general note, I note that the last four recessions have been preceded by very high energy prices. Is that going to happen again? Are we in for a nasty bout of stagflation?

[8gggggggg] 03/3/2022 08:09

TGA. South African coal miner gone from 250pto 850 p!Dakas

[bozzy_s] 02/3/2022 13:11

Hope you're right e43!

Looks like nearly all that 10k sell has been bought today. Edit a 20k sell reported late. Seems premature. I'd wait until August/September for the H1 2022 results.

Richard Bay coal price has rocketed again! Now over $300 / tonne. It's tripled in 2 months. Hope BISI have been able to sell some at the market price.

Results for Jan-Jun 2022 should be incredible.

[e43] 01/3/2022 19:51

Feeling more confident here,10k sell withstanding, on past form won't get 2021 results till end of April ,but feel the way the current year is shaping up looks very bullish,BISI small export quota justifies the current shareprice nearly by itself.

[bozzy_s] 01/3/2022 19:07

There it is.... 10k sold

[bozzy_s] 01/3/2022 15:22

I think a big sell has gone through, as yet unreported.

I'm able to buy 15,000 at 1.18

But unable to sell any

[bozzy_s] 01/3/2022 15:15

Skyrocketed today to $287 / tonne, up 10% on the day.

Now imagine if the BISI management paid 30% of free cash flow as a dividend.

I won't hold my breath. Anything above 5p a year would be a surprise. Having paid themselves ~20p per share in salaries.

I don't understand why they've taken this seemingly greedy route. Could've potentially made more by paying low management fees, and high dividends to LAS etc.

They'd possibly be better off via the higher value of LAS/BISI shares (I'd expect them to be at least 10x higher today, if management had paid dividends instead of director salaries).

They'd without doubt have a better reputation, not that that seems to bother them.

[8gggggggg] 25/2/2022 06:13

Richard's Bay Coal price March $246....

[tigerbythetail] 18/2/2022 13:41

Hi Rimau!
Yes, lack of reserves / mine life is a factor. The outrageous behaviour and remuneration of the directors (who are effectively irremovable) is a factor. So, too, are questions about actual production and logistics in South Africa. And why Bisichi is also invested in London property is a complete mystery to me - except that it suits Bisichi's directors.
Somehow you have to balance all these negatives against the probable current cash generation and come up with a sensible price for this company. It's not easy. All in all, this is one of the weirdest situations I've ever come across on the stock market.

[bisiboy] 16/2/2022 22:56

Need to factor in a substantial increase in bonus for mr Helier to around 3.5m making up for last years cut.

[rimau1] 16/2/2022 15:32

Tiger - what about mine life? I think the assumption is 3 years remaining with no disclosed progress on obtaining new reserves? I know they were moving to a new area in 2022 which should reduce opex but lack of reserves must be a factor here?

[tigerbythetail] 15/2/2022 15:39

My numbers are absurd as well.
Either BISI have had a production disaster and/or are stock bound due to Transnet's problems, OR they are making profits which are far bigger than their current market cap.

[8gggggggg] 14/2/2022 10:36

Everytime I do figures I get absurd result, so would be interested in another opinion.I note though RBC. Spot. $190 and Sept 22 $140...Dakas

[tigerbythetail] 14/2/2022 09:06

Yes, I've assumed that BISI export 20% and that the rest of the coal is sold at a discount in South Africa. My overall discount (exports and imports combined) to Richard's Bay benchmark price came out as c. 25%.
Please let me know how this compares with your figures!

[rimau1] 14/2/2022 08:58

Hi Tiger, i am in the process of writing a research report on Bisi, simply because it is a very special situation and fundamentally undervalued despite questionable governance. Just curious regarding your valuation, have you correctly assumed that only around 15-20% of Bisi coal is exported and receives the international pricing? SA domestic coal pricing is obviously much lower. I hold!

[tigerbythetail] 14/2/2022 08:45

Hi Bozzy! Yes, I've held AAZ and FXPO in past times. I'm out of both now - AAZ because I don't think it's the season for gold right now (but it's coming), and FXPO because of the massive geopolitical risk involved (Poltava is in the "Russian" half of Ukraine, Zhevago's political "roof" is Julia Timoshenko, who Putin hates, so expropriation is on the cards IF Russia do invade.)
As for BISI, it's a strange one. And I agree that BISI's directors are scandalously overpaid. BUT, given the coal price background, my best attempt at modelling this yields a crazy "current P/E" of less than 1! (This is as long as production repeats at 550K tons for the last half year, and they are not crippled by logistics problems.)
Fellow SA coal miner TGA has gone from 110p to 600p in the course of less than a year, but BISI hasn't moved much. Something has to give here.

[bozzy_s] 14/2/2022 00:37

I reckon the seller had been waiting years to offload, and just took the chance. Probably hadn't been given a sell quote for the past 300+ days.

Personally I think they should've waited - it's such an illiquid share that it would absolutely rocket on a few consecutive buys. They might've got 130p for maybe 5000 shares next week, if buyers continue to trickle in.

TBTT I recognize your ID. Are you in AAZ or FXPO? Totally different miners / companies to BISI.

Actually AAZ's director's earn much less than BISI's, despite the company being 12 times bigger (in terms of market capitalization)....

2019 AAZ director's emoluments £732k
2020 AAZ director's emoluments £714k

2019 BISI director's emoluments £2,179k
2020 BISI director's emoluments £1,096k

I've been digging a bit deeper into BISI's coal customers via its annual report (which is very well written, and very comprehensive). It appears they get a better price for their exported coal vs domestic sales. The split between export and domestic was (in thousands of tonnes):

2019 184:1094 = 14.4% exported, at a premium of 9.4% v domestic prices
2020 230:969 = 19.2% exported, at a premium of 17.7% v domestic prices


As TBTT and others have noted, the coal price is sky high at the moment. Richard Bay coal is up 155% in the past year to $196 per tonne. Just for fun - I'm sure BISI don't sell at full price, especially domestically - let's extrapolate that over a full year. 1.2 million tonnes x $196 = $235 million in annual turnover ;)

Production is falling though. H1 2021 saw a 4.6% drop to 553,000 tonnes. Still huge margins if BISI get anywhere near the Richard Bay spot price.

Just leaves the small matter of how can we ensure some of the profits are returned to shareholders. The dividend for 2019 was 6p per share. That'd be a good starting point.

[e43] 13/2/2022 14:37

Hope a few buyers come in 2mow too mop up the shares dumped at 91p,( seemed an odd price to accept ,when seller could have got more by being patient and splitting into smaller sales)

[tigerbythetail] 13/2/2022 13:39

Interesting to see how this plays out...
Given coal prices, BISI should have made more than their market cap in cash between July and December. And SA coal prices have actually increased since January, so the current outlook should be even better.
Perhaps it would be worth pointing out the bizarre state of affairs at BISI to a financial journalist like Simon Taylor at IC?

[e43] 12/2/2022 08:28

Share much the same view bozzy ,certainly v cheap, badly needs a change of direction in the boardroom.

[robizm] 11/2/2022 18:43

It is almost criminal behaviour and that is the reason these shares are not worth buying.