Bisichi Share Discussion Threads

[tim000] 28/11/2022 15:13

I’m hoping next news is a pre-Xmas upside profit warning, as happened in early June prior to the end of the half year. If there were brokers’ forecasts showing a large percentage increase in profits in 2022, just meeting those forecasts might not require an RNS. But with no guidance available, the company should make an announcement as in June.

[gaffer73] 28/11/2022 14:46

Decent volume today. News on the way??

[8gggggggg] 26/11/2022 15:11

Thanks everyone for informative posts,, I will be happy if they pay 20 p final ....and reinvest in more coal mines sold off cheaply by majors.....and U.K. property where they have good record.. Dakas

[tim000] 26/11/2022 11:25

An important point re profits forecasts for BISI. Many companies pay brokers etc to publish research on them, which utilises discussions with the company so that the profits forecasts published in the research are based on accurate info. BISI doesn’t do this, nor does it publish much detail on its operations in its results. And it certainly won’t disclose market sensitive information to investors when they email the company. Black Wattle has very complicated ownership structures, which are very opaque. Shareholders are thus not in a good position to make forecasts of BW profits attributable to BISI. So we might find that profits in 2022 are more or less than expected, for reasons that were hard to predict. That’s just the way it is, but it doesn’t alter the fundamentals of BISI being an outstanding long-term investment.

[tim000] 26/11/2022 08:40

As we all know, the Directors don’t do Investor Relations. But they are good asset managers. If you go back through all their ARs, their mining operations are consistently very good, and they have an excellent, highly experienced Director of Mining who has been at BW for many years. I suspect Andy’s long term investment approach wrt BISI is exactly right.

[tim000] 26/11/2022 08:08

BISI has struck quite a generous deal with Vunani wrt sharing future profits from Black Wattle. I hope the quid pro quo is that Vunani originate acquisitions for the JV partners. Ethan Dube, on the Boards of Black Wattle and Vunani, is the son of Sipho Dube, who was once also a NED of BW and is a very successful entrepreneur with I suspect great political connections.

[tim000] 26/11/2022 07:46

The interims mentioned briefly that the Directors were considering acquisitions. I’m sure that, with their ambitious BEE partner Vunani, there will be opportunities to expand, especially as both BISI and Vunani are now building up a war chest via profits from Black Wattle. No doubt the Directors will take their time, but I guess esg-orientated large coal miners will be looking to divest some of their mature coal mines in favour of renewables, as they look to restructure their businesses. This should create tremendous opportunities for ambitious minnows such as BISI, with assets being sold on the cheap. A bit like how the majors have divested from the North Sea, creating wealth for entrepreneurs like Andrew Austin. On a longer term view, then, BISI might grow into a much larger entity. Our management team are young enough, and I guess ambitious enough, to do that.

[tim000] 26/11/2022 07:35

I’m more hopeful than you Andy on the share price. As a small cap with no liquidity, the share price will ultimately be determined by a few private investors’ judgement of fair value. Those few don’t care about esg, but do care about dividend yield etc. It would only take the Directors to declare a generous final dividend to see a large rerating imo. Other small coal stocks have seen dramatic price increases based on far less.

[andydaf] 26/11/2022 06:16

Firstly good to see more posts on this board.Short term price movements in coal does not alter the investment case here.If you believe as i do the world is short of energy fossil fuels and especially coal are the place to be.I am not a trader but instead try to recoup my initial investments through dividends.A world recession may well come but as soon as it ends energy prices will rise again.Bisichi in my opinion has at least ten more good years in front of it.The trick here in my view with coal/oil/gas is to keep your nerve,ignore short term price fluctuations and concentrate on a longer view.Due to esg in the west i do not think Bisichis share price will ever reflect reality,if it was listed on the jse it would trade on a p/e around 3 or 4.Let see what the new year brings but dont forget after the winter stockpiles will have to be replenished so in my view coal will not collapse as much as many might think.As always GLA

[tim000] 24/11/2022 18:43

I agree with the comment that BISI is pretty much unique as an investment. And it’s genuine too. BISI is a good example of market failure, but only for a while. Results and dividends should lead to a rerating.

[tim000] 24/11/2022 18:38

There’s a slight complication you should be aware of. BISI have a minority BEE JV partner which shares in the coal mining profits. They are shown in the profits account as the profits attributable to the non controlling interest. The relevant profits figure attributable to BISI shareholders is net of the non controlling interest.

[gaffer73] 24/11/2022 18:37

Should be an increase in production which will offset the slight decline in coal prices, can't see a reason why the 40m estimate would miss.

[dave4545] 24/11/2022 17:56

I'd like to see what a share price does if they make a genuine 40 mil profit with a 30 mil market cap not sure I've seen this extreme in 22 years of Internet trading.

[tim000] 24/11/2022 17:40

Dave, BISI's coal operations were roughly breakeven in 2021 at an average coal export price (RBCT benchmark) of US$125/t. The comparable RBCT benchmark is going to be about US$280/t this year. The forward markets are currently forecasting a benchmark of US$220/t in 2023. A reasonable assumption is that BISI will be at least as profitable in H2 as in H1 this year. I won't give forecasts though until we see the 2022 outturns for revenues, costs, etc.

[gaffer73] 24/11/2022 16:57

No I don't think they will, not for a long time anyway. A world recession would see demand drop significantly but as long as gas prices remain high so will coal.

[dave4545] 24/11/2022 16:10

tim

Does a falling coal price drastically reduce profits here ?

Otherwise this looks stupid having already banked £20 mil PBT in 6 months !

[tim000] 24/11/2022 15:47

Europe needs SA coal, recession or not, but yes a recession will obviously affect coal prices. Unlikely to return to historical levels even then.

[gaffer73] 24/11/2022 15:21

This is very undervalued if coal demand stays high. A world recession is the biggest threat to this imo.

[tim000] 24/11/2022 14:24

Added another 2k today.



SA coal export volumes up 5.7% in Q3 on the same quarter a year earlier (oya). Moreover, there was a dramatic shift in the destination of exports, with the EU up 583% oya in Q1-Q3 2022, displacing China & India. The former are likely to pay more than the latter. Bodes well for BISI export volumes and prices in H2.

[jeanesy] 12/11/2022 21:07

shares back down this week

[tim000] 05/11/2022 18:00

MT has some friends who were professionals in the O&G industry, hence his interest in the sector. I’ve said this before, but I don’t understand why shrewd O&G investors such as MT haven’t realised that coal is at least the equal of O&G as a long-term investment. I agree, Andy, there’s no reason to believe that BISI is just a special situations, short-term investment.

[andydaf] 05/11/2022 16:47

In my opinion Mount Teide is one to follow if you wish to invest in shipping and oil/gas.Far better to read his thoughts than some twenty something hack working for ic.Back to BIsi,even though i am bullish for this year i am also bullish for the next 4 or 5 years.Silly cheap here but those of us on this board already know that.GLA

[tim000] 05/11/2022 14:17

Andy, being a fan of the shipping magnate Mount Teide, I already hold some shipping companies, especially SBLK.

[andydaf] 05/11/2022 10:38

To achieve really good returns you have to take a bit of risk.Ptal if it can keep the locals on side is a good bet going forwards,Petrobras and Gulf have been stand out divi payers for me this year.If the latest Pbr dividend holds thats 50% of my purchase price back this year.If you believe china will reopen anytime soon its worth looking at dry bulk shipping,it shares a lot in common with fossil fuels,a lack of capex has led to a ageing fleet and a lack of capacity going forwards.Star bulk and Golden ocean are my picks there but i should add shipping is not for widows and orphans!GLA