Bisichi Share Discussion Threads

[tim000] 09/4/2022 07:12

Imho, BISI’s BEE partner would be the most likely bidder for Black Wattle. I don’t think there is any reason to expect a bid for the company as a whole. Were Black Wattle to be sold, and it would need to be fairly soon given its short lifespan, there would be a strong business case for merging BISI and LAS, via LAS acquiring the remainder of BISI’s shares. But that assumes Andrew Heller would be happy to retire.

[tim000] 09/4/2022 06:26

John Heller is not a significant shareholder in BISI on his own account. And as I understand it, the accounting rules dictate that LAS’s shareholding in BISI is reflected in LAS’s accounts via a 41% entitlement to BISI’s profits and net assets - not 41% of its market value (which would be the relevant measure for an investment held for sale for example). Because mkt values are higher than book values (reflecting p/e multiples), this undervalues LAS’s BISI holding substantially. My point is that John Heller personally might not profit much from a BISI share price rerating. Assuming the family want him to do so, the best means would appear to be a special dividend paid by BISI following publication of the interim and annual results in August and next April respectively. They could certainly afford a large payout. That in turn would boost LAS’s profits and ability to increase its own dividends.

[e43] 08/4/2022 23:36

£4-5 share is feasible especially with such a small free float of shares available .I suspect the Heller family wouldn't dream of letting go of control for less than £50m.

[tim000] 08/4/2022 23:10

Interesting calculation! Would certainly keep your house warm in the winter. But the traffic might be a pain. BISI remains completely invisible to PIs, unlike TGA for example. Even those that know of the company, I’m not sure it’s appreciated just how much upside there is to the share price, were Richards Bay prices to average say $200 over the next few years. Say for example the discount faced by BISI averaged 50%. Margins would then be about $35/t. On 1.1 mn tonnes, that’s pre-tax profits of ca £25 mn pa, implying a p/e of under 1. That’s without considering the property assets of course. A mkt cap of £55 mn (ie share price of £5) would still look cheap.

[e43] 08/4/2022 22:40

Tim,I calculated my share of BISI annaul production in articulated lorries nose to tail with 25 ton loads would stretch about 4 miles ,seemed alot of coal for a 100k investment.

[tim000] 08/4/2022 19:24

I follow a coal professional on hotcopper, ADVFN’s equivalent in Australia. He makes the point that the long term fundamentals for coal are extremely strong. Notwithstanding the West no longer buying Russian coal, global demand is growing due to increasing demand for thermal and metallurgical coal in China and India. By contrast, the West is planning to reduce coal mining, and the expert is not aware of any new mines of significance being opened anywhere in the world. Prices might thus remain elevated in the long term. Coal thus makes up a higher proportion of my portfolio than any other commodity, other than oil and gas. And BISI remains by far the most undervalued coal stock that I know of. I now own well over 1% of BISI, and with stock increasingly scarce have turned my attention to buying up LAS.

[e43] 08/4/2022 18:45

Well done bozzy,nothing wrong in taking a profit,results day and market reaction will be interesting.
Feel EU banning Russian coal is going to be a financial game changer for BISI as it virtually guarantee's a high price for the export coal for the rest of the year.

[bozzy_s] 08/4/2022 18:34

I've taken my profits and run away! 60% in a couple of months, in an illiquid share, was good enough.

I'll keep an eye out for the results and the size of the dividend. Anything less than 5p would be a travesty. Should be somewhere around 10 - 15p, based on current profitability and director's earnings.

[tim000] 07/4/2022 13:33

Absolutely.

[rimau1] 07/4/2022 12:25

The cherry on the cake here will be that they have extended the mine life and/or sourced more coal reserves.

[tim000] 07/4/2022 11:01

According to the World Bank Pink Sheets, Richards Bay API-4 coal prices have risen from US$87 per tonne in 2021 Q1, to $100 in Q2, $135 in Q3, $157 in Q4 and $220 in Q1 2022. Current prices are about $277/t and forward prices for the rest of the year average about $250/t. That would give an annual average this year of about $250/t, with BISI roughly at break even at about $94 (according to 2021 H1).

[tim000] 06/4/2022 23:20

It’s absurdly cheap. I’ve never come across such an outlier before. Things are not always what they seem, but I’m willing to be the proverbial fool at the poker table on this occasion. I’m accumulating a large holding.

[e43] 06/4/2022 09:30

TGA also have longer mine life reserves but we have the UK property portfolio.Just need a few more investors to get this on their radars.
MM's don't seem to be many shares on their books at present .
£14-£15 tonne seems v cheap.

[tim000] 06/4/2022 08:14

I know the comparison isn’t an exact one (eg TGA export about 60% of their coal, compared with about 20% for BISI). However, at current equity prices, TGA are valued at about £65 per tonne sold, while BISI are valued at about £14-15 per tonne.

[e43] 05/4/2022 21:59

Tim,I think with AEP it's a case of why have they been subdued for so long, wouldn't be surprised to see £10 fairly shortly,likewise here BISI looks well poised in the run up to results,very pleasing how TGA has kept hitting new highs.

[bisiboy] 05/4/2022 12:42

hope you are right but nervous contemplation

[tim000] 05/4/2022 09:23

Why the jump in AEP today? BISI's day is not far away!

[tim000] 29/3/2022 09:40

I’ve just bought 1000 shares (cost £1578) which has pushed up the mkt cap by £1.07 mn!

[tim000] 27/3/2022 09:54

The price discount for South African API-4 coal exports is shrinking in 2022 Q1. Unfortunately, the well-documented rail issues are restricting supply too. But maybe not so much for BEE suppliers such as BISI?

hxxps://www.spglobal.com/commodity-insights/en/market-insights/latest-news/coal/030322-robust-european-demand-pushes-richards-bay-5500-kcalkg-nar-coal-to-premium

[rimau1] 24/3/2022 12:41

No worries chaps, i don’t like to plug stocks or tip, it just occurred to me that if you like the BISI investment case then its hard not to like AEP!

[tigerbythetail] 24/3/2022 12:30

Just to say thanks for the tips of AEP and MPE.
AEP, in particular, looks very undervalued to me.

[tim000] 24/3/2022 06:00

Once they publish results for the current half year at end-August, I can’t believe the share price will start with a 2. Or even a 3.

[e43] 23/3/2022 20:54

R1,bought AEP and some MPE also a few weeks ago,AEP exceptionally cheap but MPE more shareholder friendly both excellent long-term investments.
Back closer to home ,looks like today's close for BISI was best for 10years,shouldn't now be much resistance to £2.00.

[tim000] 23/3/2022 13:32

Thanks for the tip of AEP, I’ve bought a few.