RE: HF Valuetheinvestor22,
Thank you for taking the efforts and especially to share. I have also listened to the call several times but I refrained from doing back of the envelope calculations. Too many unknowns not the least of which is how many tonnes that they will be able to produce with the new plants. They have already said that they will sell all that they will produce and have orders for 113,000 tonnes with more to come. You already know this but for the benefit of others who may not have listened:
- strength of the Canadian $ vs rembi; stronger the Canadian dollar the larger the lower the reported sales will be (of course the China costs will be in rembi too)
- price per tonne (sales) driven by our cost of the urea raw material
- 30% margins on urban greening (primary market for the existing 20,000 tonne plant); non commital on what the margins will be from the new plants, aimed at (lower margin) agricultural market. 25% is a good a guess as any but I'm thinking it will be closer to 20% just because.
- I believe the 20,000 tonne plant will (continue to be?) be used for research and new product development; I didn't understand the ramnifications if any on this plant producing 30% product. Did I interpret this properly??
-sticking to fertiler production and getting out of urban landscaping looks like a smarter move all the time
I love the fundamentals in front of this co including the huge China market and HF's first mover advantage with China's first commercial sized SCU plant. I love the 'in' that they have with Dr. L, whereby Dr. L will earn commissions on sales that he will help to drive.
I wonder if anyone would care to share the price and earnings targets that the covering brokerages have come up with?