IperionX Limited

ASX:IPX

IperionX Limited

ASX:IPX
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$4.85 (+5.4%)
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Pinned straw:
edgescape
Last edited 4 months ago

IPX achieves first production.

Although significant, IPX won't be EBITDA positive till next year at least.

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Not sure why this news justifies a 10% move on the share price as I think we already know the tech works.

Bell Potter and CG were part of the recent raise, so I wonder if they are working the share price again to get some buddies out.

I haven't added on the news as I haven't seen something tangible from a financial perspective (such as reduced cash burn or cashflow positive now instead of early FY26)

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[held]
edgescape
Added 4 months ago

Cannacord presentation did not reveal much new

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02839380-6A1220774&v=fc9bdb61fe50ea61f8225e24ce041a0e155a9400

IPX had a past guidance of achieving EBITDA of $100M by FY26

However the May 2024 CG report seems to contradict this guidance (ie: 0 EBITDA)

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And there is no mention of EBITDA in the latest presentation. So IPX seems to have walked back on any EBITDA guidance.

HAMR is interesting and disruptive technology, but when guidance is not reiterated then perhaps there are some concerns in ramping to full production

Also there is some mentions about Green Rutile PFS for the Titan project which looks like a change of strategy while HAMR Titanium is ramping.

Am out for now when the share price popped this morning until there is a bit more certainty.

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edgescape
Added 4 months ago

Also found the Fnarena broker call for May 13 2024

https://fnarena.com/index.php/2024/05/13/australian-broker-call-extra-edition-may-13-2024/#IPX

Below is an interesting snip from Cannacord with numbers.

Canaccord Genuity rates ((IPX)) as Speculative Buy (1) –

Canaccord Genuity maintains a Speculative Buy rating on IperionX, with an unchanged target price of $3.60. The report highlights IperionX's progress in establishing its titanium metal production facilities in Virginia, US, using patented process technologies aimed at lowering production costs compared to conventional methods.

The first phase of production is expected to commence in mid-2024 with an initial capacity of 125 tonnes per annum, potentially scaling to 2,000 tonnes by mid-2026. The broker notes, based on current cost and pricing assumptions, this could yield an EBITDA of US$150m annually, rising to over US$300m as capacity expands to 4,000 tonnes.

The broker also highlights the partnerships with United Star Holdings and Vegas Fasteners are developing, which could lead to commercial-scale product supply agreements, underpinning the potential for a re-rating of IperionX's stock.

The report also acknowledges the fragility of the North American titanium supply chain, exacerbated by geopolitical tensions affecting titanium sponge feedstock predominantly controlled by China and Russia.

This report was published on May 3, 2024.

Target price is $3.60 Current Price is $2.12 Difference: $1.48

If IPX meets the Canaccord Genuity target it will return approximately 70% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 70.67.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 3.00 cents.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 70.67

Above confirms that there was guidance and now removed in the May 2024 broker report (see my CG post May 2024)

Also Titanium spherical powder prices have started trending down to around $144/kg so could hit $130/kg USD end of this year.

Even taking the optimistic case that IPX can produce about 30t this year and 125t next year (FY25), there will still be losses until the process scales in late 2026 since IPX is running nearly 6 months behind..

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