Sylvania Platinum Share Discussion Threads

[johnrxx99] 12/1/2021 05:16

I'd like to add the Graham Number is GBP1.69.

[mr stephens] 11/1/2021 22:52

Metals daily rhodium now $19500

[riverman77] 11/1/2021 22:45

Cash adjusted PE

[stemis] 11/1/2021 22:33

I don't think $100m net profit equates to a P/E of 2.7

At 94p the market cap is $345m so 3.45

[mr stephens] 11/1/2021 22:18

New investors. You may not know but in the last lockdown they closed and paid all their team snd in the final quarter still showed a profit. Right culture

[mr stephens] 11/1/2021 22:16

Don’t think there is any worry about discounted cashflow or cashflow full stop. I think $90m in the bank sorts that out. This is such a simple business from an investor perspective. From an operational perspective it’s very intricate but they’re brilliant at it

[maxplus2] 11/1/2021 21:57

Does the 145p target assumes discounted cash flow? If not, the 95p is the fair price that takes into consideration imho

[mr stephens] 11/1/2021 21:38

That’s a matter of interpretation. Current price based on a full year ending June of $100m net profit gives a forward pe of 2.7. So I would say SLP is gaining more admirers. 5m shares traded today support that view. The quarter plus half year plus dividend announcement are in my opinion not priced in. I do
Take note of ST . £1.45 target based on what we know

[maxplus2] 11/1/2021 21:06

Dies the recent rise takes into consideration the anticipated results?

[kennyp52] 11/1/2021 20:48

Incredible fundamentals in play here . Cash rich . What more do investors want ?

[mr stephens] 11/1/2021 18:05

A few figures being quoted by new folk to this wonderful share. Just to correct them. No criticism intended as we are all in this together. 44m was the net profit after tax in the last financial year. 1st quarter this year $21m net. 2nd quarter $25m forecast(mine) net. So as much or more than the last financial year in the 1st half of this year. Potential for the year $100m net after tax. Regulars will know I’m consistent on this. Two announcements to come. 2nd quarter results next week or week after.
Then for those that can’t add up the 1st half total result and dividend announcement in the 3rd or 4th week Feb. They pledged to announce the “metal price” dividend in Feb for payment in the 3rd quarter. As they will have around $85-$90m in the bank less any capex it should be substantial.last year brokers got us all excited with forecast of an 11.6p dividend that became 1.6p
They would be unwise to disappoint again
Finally I think the share sell off was actually to inject some liquidity into the stock to help manage the price
Over 5m shares traded today on an equal buy sell ratio. That is a record outside of results time
This will break a £1 to £1.20 by the end of the month and when the full results are announced Feb your looking at 1.30 to 1.40.
If the pe was to be at 6 as it used to be then year end could be nudging 1.75 to 2.00
Reasons to be cheerful

[thesasquatch] 11/1/2021 17:14

Currency fluctuations and potential restrictions on mining might have kept a few people on the sidelines (I was only part in until very recently), both of which may settle as the year progresses but are entirely contingent on the COVID situation in SA.If we maintain a PE of around 7 on £50m net profit and cash is around where Mr Thompson reckons it'll be then that would equate to £1.48 per share in the short term. Hopefully we will get a nice chunk of that cash paid back shortly though! Just my 2 cents...

[martinfrench] 11/1/2021 13:53

bloody hell that simon bloke sure sure moves the price

[thelongandtheshortandthetall] 11/1/2021 13:31

2.3m 4.5m 10.1m 12.6m 19.5m 44.0m

This is profit before tax from 2015 onwards. In this time there has been a slight reduction in the number of shares too. So it's not growth by placings.

What kind of PE would normally be attached to a business like this x20-30-40?
If you allow for risks, lets say a PE of 5.4 is incredibly reasonable. So SLP could double on what is already known.

One thing (IMO) holding SLP back is the transitory nature of previous spikes in PGMs. I believe this is not the case now. Yes, the PGM prices will fluctuate considerably but fundamentally they are in greater demand - and for a while to come.

[martinfrench] 11/1/2021 13:27

4 would also be very low compared to nother miners

certainly 7-9 isnt out of the question

[allonblack] 11/1/2021 13:20

Whats the right pe for this stock? How do we decide 2.7x (92) is too low but 4x (140) is fair? Just bought in so genuinely interested in what the upside is. Thanks

[thelongandtheshortandthetall] 11/1/2021 13:14

Good right up by Simon Thompson above.
Agree.
I imagine that'll get the word out a bit :)
EDIT: Might have just started..

[mo123] 11/1/2021 13:12

Cheers for the info epicsurf. Recently noticed that simplywallstreet had a div of 15cents for the year. I assume that they have included a special div of around 10cents per share in their forecast. This would still leave the company with plenty of free cash, but at this stage It's merely a presumption.
Just have have to wait and see.

[epicsurf] 11/1/2021 12:14

Simon Thompson today ic
SLP:91p), a cash-rich, fast-growing, low-cost South African producer and developer of platinum, palladium and rhodium, have been on a tear since I last highlighted a cracking buying opportunity at 64p (‘Five small caps for value and more’, 2 November 2020). In fact, the share price got within pennies of achieving the 100p target I outlined and is now 528 per cent higher than the 14.5p entry point in my 2018 Bargain Shares portfolio.

The rally is more than justified as I now expect analysts to push through eye-watering earnings upgrades when the company releases its first half results at the end of January. That’s because the price of rhodium, a mining by-product used as a catalyst in three-way catalytic converters in cars, has surged from US$6,000 per ounce (oz) at the start of July to a record high of US$18,200 per oz as car manufacturers scramble to get their hands on a commodity in a tight market to comply with new government emissions standards. Rhodium is two to three times more effective than platinum in an auto-catalyst, hence its appeal to car makers. 

The recent introduction of stricter emissions standards for passenger cars in China, new EU legislation limiting nitrogen oxide emissions in on-the-road driving tests (comes into force in September 2022) and rebounding China car sales are the main drivers behind the booming rhodium price. Furthermore, the lack of investment in new mines means that the global rhodium market is heading towards a supply gap whereby annual demand could exceed output by around 25 per cent within the next five years.

Bearing this in mind, rhodium accounted for 12.5 per cent of Sylvania’s PGM prill split in the 2019/20 financial year and 46 per cent of group revenue of US$115m. It’s going to be an even higher percentage of revenue in the financial year to 30 June 2021. To put the scale of likely upgrades into perspective, analysts at house broker Liberum Capital have only embedded an average rhodium price of $10,000 per oz into their forecasts of annual revenue of US$145m, up from US$115m in 2019/20. The broker’s revenue estimate also factors in an average price of US$2,100 for palladium (spot price of US$2,310 per oz); and US$925 for platinum (spot US$1,084 per oz). Palladium accounts for around 25.5 per cent of the PGM prill split and platinum about 61.7 per cent.

In other words, I reckon Sylvania’s average spot basket price is US$3,500 per oz or 25 per cent higher than in the first quarter to 30 September 2020 when the company posted net revenue of US$41.5m and cash profit of US$29.7m on output of 18,000 ounces. Based on annual production of 70,000 ounces, and assuming PGM prices hold as seems highly likely, then Sylvania’s annual revenue could come in US$30m higher than current forecasts, almost all of which will drop through to operating profit.

To put the likely profit windfall into perspective, Liberum are pencilling in (pre-upgrades) pre-tax profit of US$99m and a net profit of US$71m. By my reckoning, Sylvania could make a post-tax profit closer to US$93m (£68m) and almost double its net cash to US$105m (£77m) by the June 2021 year-end.

Strip out net cash from Sylvania’s market capitalisation of £250m, and my financial models suggest the shares are trading on a forward cash-adjusted PE ratio of 2.7. I raise my target price to 145p and rate the shares a strong buy.

[haywards26] 11/1/2021 11:11

Just bought in here, looks a good investment given likely forward divi yield and potential share price appreciation with profitability material increases given the charge upwards in metals pricing.

[zho] 11/1/2021 10:36

And now a further reduction to just under 18%

[zho] 11/1/2021 10:19

TR1 - Africa Asia Capital have reduced from 19.8% to 18.7%

[thelongandtheshortandthetall] 11/1/2021 09:29

Rhodium $19350 on metalsdaily.

[thelongandtheshortandthetall] 08/1/2021 23:07

Ok freddie.
Keen to hear your thoughts!
:)