Consensus community valuation
$0.835
Average Intrinsic Value
174.1%
Undervalued by
Active Member Straws
#Financials
Added 4 months ago

FY2019 Financial Summary  (5th of March Presentation)

2019 Revenue: $25.1m (up 40% YoY)

2019 NPAT: $3.0m (significantly up on loss of $1.0m: 2018)

Strong Operating Margins: 54% Gross Profit Margin

2020 Forecast Revenue: $50m-70m (up 100% YoY)

Strong Balance Sheet:

  • A$15m in cash
  • Receivables/Inventory of $20m;
  • Debt Free;
  • Net Assets approx $30m
  • Net Cash from Operations for 2019: $7.6m
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#ASX Announcements
Added 5 months ago

Monday 17th February 2020

China Update – Key points:

  • Beijing office now back at work
  • Government approval to re-start factory
  • Production to ramp up over the next month
  • Inventory held outside China to last till mid-year
  • No treatments in China planned until late March/April and no delays expected; no effect on FY2020 sales guidance

Brazil Project

Through its Brazilian licensee, PET has received a contract from CEDEA, to treat one of Rio de Janeiro city’s main drinking reservoirs.

The application has already commenced and will continue for the next three months, with an estimated value of over $2m.

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#Updates/Reports
Added a week ago

06-July-2020:  Business Update

Interesting that this announcement (Business Update) was NOT marked as price sensitive.  Despite that, the PET SP has risen 3c so far today (up +10.7%) off a very low base - they've been heading steadily south east for 12 months!

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#Market Update
Last edited 4 weeks ago

16-June-2020:  Market Update

The Market is not keen on this update - PET is one of the few stocks being sold down today.

PET concerns over secondary global outbreak of Covid-19

The Board of PET today announces that due to new outbreaks of Covid-19 in several countries but particularly in China and the US we are adopting an extremely cautious attitude to our short-term forecasts. While no projects have been cancelled – and, in our opinion , are unlikely to be affected in size or scope, there are  concerns that, in the event of substantial secondary outbreaks, some projects will be delayed in order for governments to deal with more immediate health problems.

Accordingly, we are reducing our short-term revenue expectations for the remaining six months of this year. We are now forecasting a revenue range of $30 – 40 million for full year 2020. While this is a substantial reduction over our previous forecast range, if achieved it would result in a sales increase of approximately 40%, at the midpoint, over last year.

It is to be stressed that we are continuing unchanged with our plans to substantially increase our production capacity; final determinations are being made to supply contracts for the building of  the new production facility which will have an initial capacity of 20,000 tpa with the ability to double that quickly as required.

Management is keen to keep the market fully informed of all business activities and to take a conservative approach in these uncertain times. Material changes to forecasts over the weekend prompted this revision.

The Company’s Balance Sheet remains strong with $35 million in cash and $16 million in receivables from primarily government bodies.

Managing Director Lachlan Mckinnon stated: 

“It is important to note that PET remains in a very exciting position with a strong balance sheet and extraordinary global opportunities.  “Phoslock® remains the prime product for remediation of algae in water around the world”. 

--- ends ---

Disclosure:  I do not hold PET shares, but they are (unfortunately) on my Strawman.com scorecard.

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#ASX Announcements
Added 6 months ago

Friday 31st January, 2020

Business Update

Key Points:

  • Revenue FY 2019 : $25.1 m (up 53%on FY2018)
  • Some applications carried forward to 2020
  • New large factory premises secured
  • Debt free,$32m cash & receivables
  • 2020 Revenue forecast : $50 - 70m; (up 100% on FY2019)
  • Global project pipeline now $380m (up $50m)
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#Updates/Reports
Last edited 3 months ago

30-Apr-2020:  Business Update  and  Quarterly Cashflow Report and  Appendix 4c - Page 4 Amendment

First off, they didn't explain the reason for the third announcement - the Ammended 4C, but I will:  They had a mathematical error on page 4 that resulted in them stating that they had (NEGATIVE) -0.44 "Estimated quarters of funding available".  Quite an achievement!  The correction improves things, but not much:  The new figure is 1.44 quarters, so at their current cash burn rate that suggests they will run out of cash some time in August this year.  However, they've just raised capital - this month, in April 2020 - which is not factored into the March quarterly report.

The following are excerpts from their Business Update announcement:

 

Capital Raisings  
 
In April, PET undertook three capital raisings which, when completed, will generate some $20m in new equity. A $12m Institutional placement was extremely well supported; PET directors and officers personally undertook to invest $3m (requiring shareholder approval at the 25 May Annual General Meeting); and a Share Purchase Plan (SPP), while currently capped at $5m, is already oversubscribed.  All three capital raisings were priced at the same 50c per share. 
 
The SPP officially closes today.  Demand has been very strong from our large retail shareholder base. The Board plans to wait until final numbers are received before deciding how to treat excess demand for new shares. 

These funds will facilitate the Company’s rapidly growing business opportunities in China and elsewhere. China’s desire to get environmental remediation projects started is accelerating. The additional working capital these funds provide will enable us to commence large projects and to compete for the ever-expanding global remediation and corporate opportunities. 

 

Business Update 
 
Key Points: 

  • China Projects and Factory production largely unaffected by CV19 crisis
  • Some International sales may be delayed
  • 2020 Revenue forecast: unchanged $50-70m; (up 100% on FY2019)
  • Balance Sheet significantly strengthened through Successful $20m new Capital raisings
  • Debt free, $50m cash & receivables
  • $380m Global Project pipeline   

 

China 
 
As previously advised, PET’s China Projects and Phoslock® production at our Changxing factory have been largely unaffected by the Covid-19 crisis.  
 
All three of PET China’s current major projects are in Yunnan province, in south western China. This province has been essentially unaffected by Covid-19.  
 
The contract value of the Shilongba restoration near Kunming, Yunnan province, has increased in size to $25m, with some $20m to be completed in FY2020. This project will include significant quantities of Phoslock®, as well as installation of a water treatment technology, building of wetlands, and engineering technology. On completion, a five-year maintenance contract will commence, with a value of some $5m pa.  
 
Results from the 2019 application Xingyun Lake application of some 3,000 tonnes of Phoslock® have met or exceeded all criteria. A further 4,000 tonne application of Phoslock® to Xingyun Lake is planned over several campaigns during 2020. 
 
A significant in-lake Phoslock® trial for Lake Dianchi is currently being finalised. This is China’s eighth largest freshwater lake, 300 km2, six times larger than Sydney Harbour, and ten times larger than Lake Xingyun.

[click on first link above for the photos that accompany the report]

 

International

The pandemic has affected the commencement date of most first half International projects in Europe/UK, United States and Canada. A number of these projects have been moved to the second half of 2020. 
 
We have made significant sales in Brazil since 2017. Several projects were undertaken this quarter including a large inner-city lake for drinking water in Rio de Janeiro. Work is scheduled to re-commence on existing Brazilian projects from May.

 

Pipeline

The current project pipeline remains at $380m, comprising $250m in China and the previously announced increased total of $130m of new International projects. This covers the period to end 2023 and includes six Chinese projects and over 40 International projects.

The criteria for pipeline inclusion is that projects are at an advanced stage, dependent on final customer approval and/or financing. For multi-year projects, we have used our best current estimate of sales over the forecast period.

 

...click on the first link above for the full report, including:

  • Changxing Factory 
  • Financial Commentary 
  • Annual General Meeting 

[The 2020 AGM will be held on Monday 25 May at 2pm. Due to restrictions relating to the Coronavirus Crisis, the AGM will be held as a Virtual Meeting.]

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#Financials
Added 3 months ago

FY2019 Financial Summary &. 31 March Balance Sheet

  • 2019 Revenue: $25.1m (up 40% YoY)
  • 2019 NPAT: $2.7m (loss of $1.0m: 2018)
  • Strong Operating Margins: 54% Gross Profit Margin
  • Net Cash from Operations for 2019: $7.6m

31st March 2020 Balance Sheet Position

  • A$10m in cash
  • Receivables/Inventory of $23m;
  • Debt Free;
  • Net Assets > $30m

China Projects:

  • $40m-$55m –Forecast MaintainedoXingyun Lakes & Catchment –circa $10-15moShilongba Reservoir –circa $20m
  • Dianchi Catchment Area –scope being determinedoBeijing Canals –Maintenance –circa $2m
  • Beijing Wetland –Maintenance –circa $2mo20 Other Projects in China: Range of 3,000 to 6,000 tons -$9m to $18m
  • (80% Chinese Government Customers , 20% subcontracting)

International Projects: >$10m –range reduced -Business likely to be impacted by CV19

  • Existing Customer Projects: 10 customers –approx 2,000 tons -$6m
  • New Customer Projects: 14 projects –range of 1,500 to 3,000 tons -$4.5m -$9m

China rebounding more quickly than expected

Changes in Balance Sheet , due to slower International sales

  • $10m –Project Funding -Shilongba & Dianchi projects -engineering works, accelerated funding for new and existing projects , starting April 2020.
  • PET Board is wanting a higher level of working capital to fund FY20 projects and accelerated growth of projects in China –short term bridge to longer term debt facilities
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#Company Presentations
Last edited 3 months ago

09-Apr-2020:  Share Placement Presentation

Also:  Capital Raising Successfully Completed

PET have raised $12m of new capital from Institutions plus a further $3m from Directors and Officers (Management) of the company, and announce an SPP for existing shareholders.

Key Points: 

  • $12m share issue placed at 50c to Australian and International Institutions.
  • Directors and Officers to contribute a further $3m+, subject to shareholders approval.
  • Share Purchase Plan (SPP) for shareholders to be offered at 50c.
  • Funds to be used to fast track large Chinese projects.

--- click on link above for more ---

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#Risks
Last edited 5 months ago

28 Feb 20

The old chestnut of sovereign risk when operating in China reared its head in the deferral of $1.5m revenue due to closing treatment whilst the locals have a fish during the holiday season.  Better a green fish than no fish, the next lake might be half hours drive further away?????  Trying to mimimise criticism and appease the locals much.

24 Oct

Weekly low 81.5c......so market release either unfortunately timed for me as I didn't get my top up, OR well timed to achieve Management goal and I dodged whatever had bought on the negative sentiment.  depends on your viewpoint I guess.

Older.

At present the rats are deserting the titanic. There has been some large director trades which is kind of a bearish signal. I am a little ambivalent towards this is for a long while they were paid very little as most everything got put back into the business. It is not unreasonable for them to take some cash off the table.  As the old saying goes directors sell for many reasons but buy for only one, so watch that space.

 

it is my belief that the share price may well bottom in the 0.60-0.80 range at which time I would be topping up. 
 

As for business. Second factory coming online building production to meet demand, and for me most importantly the Everglades contract win, albeit small scale at this stage. I believe this could be very very significant going forward. The Americans won't just drop multi million dollar contracts rapidly without a lot of process and proof of concept. There pockets however are deep, once they decide to reach into them.

I believe in the business, it's a small part of my overall portfolio which I believe will be less in coming months. Price versus value. DYOR!!

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