Catch the Wind Ltd V.CTW

Updated Projections

[peakoiled]

The post you were referring to was mine. I did an update since that post with more realistic numbers (see below). I'm not sure the year end call will cause the share price to do anything at all. Unless of course they announce a large follow-on order. I don't think testing orders of 1-2 units helps much at this point, except for testing on new turbine types. What CTW really needs is a large order!

Below is my updated analysis that uses a ASP (average selling price) of $50,000 per Vindicator instead $125,000. This was due to the CEO saying the ASP will be coming down quickly over time along with the cost of producing the unit. This is good news because more wind farm operators will be able to afford the Vindicator. It also assumes a net profit margin of 10% and a p/e of 15.It also assumes only 10% market share taken. This is conservative and could be higher.

From Q1 2011 conference call guidance was:

2011: 45 units

2012: 600 units [600 x .0005 conversion factor] = 30 cents price per share

2013: 1000 units [1000 x .0005 conversion factor] = 50 cents price per share

conversion factor is :
.05M (unit sales price) * 0.1 (net margin) / 150M shares * 15 p/e = 0.0005

Some of my own assumptions:

Global wind market size of 940,000 MW by 2025 (11.6% CAGR from 2010) [source below *]

Global wind market size as of 2010: 188,100 MW installed [source below *]

Assume average turbine size 2MW (ie 94,000 turbines installed in 2010)

Assume 10% of market captured. Market growing at 11.6%. (there will be competitors)

Assume no portion of existing market only new turbines (conservative)

Assume $50,000 average selling price of Vindicator

Ramp up to 10% of total market share

2014: 3,000 units [0.0005 conversion factor x 3000] = $1.50 price per share

2015: 5,000 units [0.0005 x 5000] = $2.50 price per share

2016: 10,000 units [0.0005 x 10000] = $5.00 price per share

2017: 20,000 units [0.0005 x 20000] = $10.00 price per share

Continue to get 10% market share while market is growing at 11.6%.

2018: 22,617 units

2019: 25,241 units

2020: 28,169 units

2021: 31,436 units

2022: 35,083 units

By 2016 10,000 units sold at $.05M each = $500M revenue

Assume 10% net profit margins = $50M net income

Assume p/e of 15 = market cap of $750M in 2016

$750M / 150M (fully diluted) shares = $5.00 price per share

$5.00 / 15 cents = 33 X in 5 years

* https://www.emerging-energy.com/uploadDocs/Excerpt_GlobalWindTurbineMarketsandStrategies2011.pdf

[powerhour]

great post Peakoiled. thanks for the insight. im sure new investors are drooling over the potential here.

[RE38]

Great analysis. I suggest you put your own blog together outlining all this information. Then you can format it to be more readable that what SH provides and ensure when someone links to your info that credit is given to you. I have seen the same and similar posts on this board but had no idea that the info originated from you. 

[xsnrg]

Absolutely, great analysis.  I would also like to point out how conservative that analysis is as well.  10% on net profit margins is VERY low even with increased competition and a company that is growing as fast as CTW would have a P/E ratio way higher than 15.  Great to be conservative though because then your never dissapointed and things always go wrong somewhere.