AFT Pharmaceuticals

[RupertBear]

https://www.edisongroup.com/publicat...to-fy20/25644/

Can't believe I missed this all the way back in November of last year... AFT $5.53 price target they say

thanks for posting trader jackson very good read

[Cadalac123]

thanks for posting trader jackson very good read

They basically stated whatever was in the report and come up a price out of their ass come on lol

That said some good organic growth which I overlooked a little with their questionable accounting methods lol

[BlackPeter]

https://www.edisongroup.com/publicat...to-fy20/25644/

Can't believe I missed this all the way back in November of last year... AFT $5.53 price target they say

It might be just me, but I fail to remember any example where Edison got it right. Do you?

I do remember however companies like e.g. CRP and PEB - both had (and PEB still has) amazing Edison reports, but look what they did so far with shareholder funds.

Edison is paid for producing optimistic (often incredibly optimistic) reports (otherwise the companies ordering these reports would go to somebody else), and this is what they do.

Why do you think it will be different for AFT?

[RupertBear]

Oh dear The Bear thought it was quite a helpful report oh well lesson learned

[trader_jackson]

It might be just me, but I fail to remember any example where Edison got it right. Do you?

I do remember however companies like e.g. CRP and PEB - both had (and PEB still has) amazing Edison reports, but look what they did so far with shareholder funds.

Edison is paid for producing optimistic (often incredibly optimistic) reports (otherwise the companies ordering these reports would go to somebody else), and this is what they do.

Why do you think it will be different for AFT?

There is no doubt they got it wrong on PEB and CRP (which by the way are very, very different companies to AFT - namely that AFT has actually been profitable for most years it has been around) but Edison research thousands of companies, I don't think they have got it wrong all the time (like you would seem to imply - that every company they have covered has only given shareholders very poor returns).

I am well aware they are paid (and this is noted on the report itself so everyone should be aware of this), but I am not sure on any institution producing research that isn't paid or and/or given exclusivity and/or benefits (financial or non financial) in one way or another (whether it is a fee from the company directly, or via institutional days, or via brokerage itself from the buying and selling of the company in question).

I never said AFT was different, nor did I say it was the same as PEB or CRP... just that Edison have come up with $5.53 price target (and that one can read into that any way they would like)

At the end of the day, I feel it is interesting to see there views and ideas... and I would say $5 by November of this year is not 'optimistic', rather, actually quite achievable - time will tell either way.

[ziggy415]

Just be aware that there is a difference between licensed and registered......licensed allows a company to have the rights to sell but you need registration to allow them to actually sell into that country. AFT DON,T HAVE MANY REGISTRATIONS AND THESE TAKE 2 TO THREE YEARS TO ACHIEVE...oops cap lock on...they do have $us 42 million loans at 13.5% but are in process of changing this to major nz bank at much lower rate this March, so even no more sale,s they still will increase bottom line by 3 or 4 million dollars, so not all bad....sold out at $3.40 but kicking self ever since....did same with A2 milk and xreo so I never learn

[BlackPeter]

There is no doubt they got it wrong on PEB and CRP (which by the way are very, very different companies to AFT - namely that AFT has actually been profitable for most years it has been around) but Edison research thousands of companies, I don't think they have got it wrong all the time (like you would seem to imply - that every company they have covered has only given shareholders very poor returns).

I am well aware they are paid (and this is noted on the report itself so everyone should be aware of this), but I am not sure on any institution producing research that isn't paid or and/or given exclusivity and/or benefits (financial or non financial) in one way or another (whether it is a fee from the company directly, or via institutional days, or via brokerage itself from the buying and selling of the company in question).

I never said AFT was different, nor did I say it was the same as PEB or CRP... just that Edison have come up with $5.53 price target (and that one can read into that any way they would like)

At the end of the day, I feel it is interesting to see there views and ideas... and I would say $5 by November of this year is not 'optimistic', rather, actually quite achievable - time will tell either way.

I did neither say nor imply that Edison gets it always wrong. Just said that I am not aware of a case where they got it right - despite having seen some of their reports for various NZ companies (including above examples). Different things ;

Assuming you are holder - how do you feel about the equity ratio of 17.5% (HY2020)? While this is an improvement to previous years (in 2017 it was 8%, I think). I guess these are numbers you normally would expect from a bank, but not from a pharma company?

Actually - it is worse, just noticed that heaps of the hardly existing assets are "intangible". NTA is actually a negative number - just lets hope the auditors got that intangible value right - shall we?

Not sure I see the high IP value, given that the patent for their Maxigese is based on something doctors knew and applied (and continue to apply) already for decades (mixing Paracetamol and Aspirin). Not really rocket science ... but I do see a debt load which would kill most companies if even small things would not go to plan.

Just noticed - there is a "going concern assumption" in the HY report. Didn't further investigate their loan situation, but this is something I would do as a holder ... ah yes, but comforting that the directors are confident they can raise more money if needed - well, that's what they say in the report ;

Just curious - how are things going in securing a continuation of this bank loan beyond 31. March? Does anybody know?

Anyway - nough said. Not my cup of tea, but I am sure all share holders thoroughly analysed the risks and potential benefits and are happy with the return for the risk they take based on the current SP and balance sheet.

[trader_jackson]

I did neither say nor imply that Edison gets it always wrong. Just said that I am not aware of a case where they got it right - despite having seen some of their reports for various NZ companies (including above examples). Different things ;

Assuming you are holder - how do you feel about the equity ratio of 17.5% (HY2020)? While this is an improvement to previous years (in 2017 it was 8%, I think). I guess these are numbers you normally would expect from a bank, but not from a pharma company?

Actually - it is worse, just noticed that heaps of the hardly existing assets are "intangible". NTA is actually a negative number - just lets hope the auditors got that intangible value right - shall we?

Not sure I see the high IP value, given that the patent for their Maxigese is based on something doctors knew and applied (and continue to apply) already for decades (mixing Paracetamol and Aspirin). Not really rocket science ... but I do see a debt load which would kill most companies if even small things would not go to plan.

Just noticed - there is a "going concern assumption" in the HY report. Didn't further investigate their loan situation, but this is something I would do as a holder ... ah yes, but comforting that the directors are confident they can raise more money if needed - well, that's what they say in the report ;

Just curious - how are things going in securing a continuation of this bank loan beyond 31. March? Does anybody know?

Anyway - nough said. Not my cup of tea, but I am sure all share holders thoroughly analysed the risks and potential benefits and are happy with the return for the risk they take based on the current SP and balance sheet.

All very valid questions.

Almost all of your questions are balance sheet related (nothing on growth rates or cash flows or how the company generates its income, or perhaps the history of the company and how it has dealt with very trim balance sheets its entire life, starting with just $20k cash the late 90's, yet now turning over $100m annually)

I am not too 'worried'/concerned' about intangibles or NTA for a growth company, I'm more worried about how the company generates its income aka that it has a good product (and I suppose they have a 'simple' product, but sometimes simple products are the best) and that they are selling more and more of that product (aka growth), and cash flows are coming through the door... Enron had a really innovative product, so innovative and so new and fantastic (a bit like rocket science?) that nobody else could understand what was happening... I'm glad AFT is not an Enron (although AFT might one day get to the size Enron did, just not end in the same way ).

Not too fused about the 'going concern assumption', 88% of the stock is owned by 2 fiercely loyal shareholders (1 of them being the founder - even higher percent if you count other managers) who are happy to contribute cash in one way or another - so when they say they are confident they can raise the cash, I am quite sure they could!

Negotiations going well with the banks they say.

It will certainly be interesting to see how AFT goes, and I'm (so far) glad to be involved since the IPO back in 2015 (topping up periodically in the low $2's)

[King1212]

Edison did cover SEA...and look at SEA now.....

[trader_jackson]

Aft distribute many products for overseas companies in the way they have sell their own products through distributors overseas.

They seem to like to accept losing some value of the sales in order to keep their costs (and risk) low.

https://www.afr.com/companies/health...0200211-p53zsp

Look at the blackmores result... an absolute disaster as a result of trying to control more of the supply chain...