Aecon Group Inc T.ARE

Windsor to Quebec Train

[Dibah420]

Gabriel, 3 questions.
Is it high "frequency" or high "speed"? 
If the former, is there data supporting ample passenger/freight demand?
What is the probability that a "green" project approved by a JT govt.
will be canned by a vindictive PP in office?

[Gabriel]

Thanks Dibah. You always ask good questions. What I have learned, researched, investigated, calculated, etc. 1. The price tag is in the vicinity of 120B. Obviously no party will give you the exact amount. I remember being elegantly but literally thrown out of a meeting with SNC from their main boardroom (looked like the UN executive council room) when they were bidding on highway 25 amd I was

[Gabriel]

and it is our largest project in this country since the constitution train and we are selling at less than 5 x adjusted EBITDA which was 126.9B last Q3. 126.9B * 4 Q/year * 5 = 42$ per share.   Most shareholders and funds behave like worms looking at the trees or daily variations. Some wiser ones like you and many on this board see the forest .. like eagles do from the top.

[Gabriel]

Forgot to add the link for those who did not read our last earnings report.   https://www.aecon.com/press-room/news/2024/10/31/aecon-reports-third-quarter-2024-results

[Gabriel]

The fact that we are not in any consortium puts us in a privileged position to side with the winner. Anyone explain to me what is the downside here for Aecon. Why are we at these levels is as insane as when SNC was below 30$ let alone 20$..

[Henrye]

Gabriel in this case not being part of consurtium has many benefits. Normally being the lead applicant , especially for this scope of monumental project would be very expensive to quote as it would require in advance tons of revenue , and human resource and many other bells and whistles.  So waiting for a winner is clearly a win win for Aecon. The winner would use Aecon and others to execute

[Gabriel]

Selected bidders usually get paid often about 2m each to prepare their bids. It barely covers their cost though.

[Henrye]

Gabriel, much appreciated information! I never knew this!  My motto " always be learning " 

[Ronbromleygross]

Thanks Gabriel for your usual candid, intellectual, humble and thoughtful analysis to not only educate us all here but try to make us money in the process based on your obvious and above the cut "3D  analysis" that many retail investors and professional analysts in this industry and sector plus even company executives in many cases who cannot see the opportunity in front of them to

[Gabriel]

Thanks Ron for your equally appreciated posts and advice. This was shared with me yesterday. Thank you for sharing. This is it for infrastructure renewal and energy shift. https://www.ontarioconstructionnews.com/pomerleau-calls-for-action-on-major-infrastructure-projects-amid-labour-shortages/

[Dibah420]

Thanks Gabriel.  Here are some thoughts on TGV. When SNCF talks of Grande Vitesse it is around 320 kms/hr.  Ditto in Japan. In China it is 350kms although the ShanghaiMaglev goes at an astonishing 450kms/hr. Decades ago during my grad school days at McGill I used to take the much touted Turbo to TO on weekends.  It was hyped at 220 but never reached that speed, although it did cut

[Gabriel]

Fully agree. I was equally surprised when I learned it is a high frequency with numerous trips a day and not a TGV which would cost even more and would not justified based on density (persons or inhabitants per km2). I have not seen the economics of the comparison.

[Gabriel]

Dibah, I have good news for you. The proposals are for a high frequency train but Via Rail has also apparently asked for a TGV option. Are you connected ? Taking off to Doha in a Q-suite. Will be at the Sheraton in about 12 hours in case..