Post by
hassy on Feb 05, 2018 6:37pm
Valuation
Hi all
got into Hiku last week- after going through the biz model. Very interesting.
Based on what I can find in Doja's response (4 months ago), the company is looking to generate 25k kg * $12/gram = $300M in revenue, say at 30% margin, we are at around .45/share (based on fully diluted at 200M shares.
that would give us target share price of $9+ even at conservative PE of 20. This has not even factor in the TS/ VDP.
Does that not make this much better story than the "big 3"? Obviously all comes down to execution but given their past history with SAXX/ Google, not sure why we would really take such a hit over the past couple weeks..
"We want to ensure we have internally addressed supply initially for legalization in July of next year and believe the DOJA brand will generate sales in the future that far outstrip 25,000 kg per year. Whether all that flower is grown in DOJA owned facilities or by partners that grow to DOJA standards is to be determined. We do have strategies and discussions about business to business supply as well."
"We have always built our business plan on grams ranging from $10 to $15 per gram depending on strain. The yields, THC content and growth cycles differs from strain to strain so we don’t believe in a flat pricing structure. On the upper end of the pricing range you currently have Medreleaf and Hydropothecary selling at $15/gram plus. As a premium cannabis producer we think that an average price of $12/gram is completely realistic. We also plan to leverage the Okanagan and Tourism in our strategies to authentically provide a premium experience."