OEC 2.97% 49.0¢ orbital corporation limited

interesting post on yahoogroups

  1. 677 Posts.
    Hi Ian se what you think

    Subject: interesting speculations




    I will stick my neck out and categorically say that this capital
    raising is not for JP5 ( or not primary reason ). My conclusion is
    based on 2 points:

    1. The JP5 project is too small for such an expensive capital
    raising in terms of dilution! Also, this capital raising sounded like
    for immediate needs.

    2. Patterson is guaranteeing the shareholder placement to the
    tune of (3.2m?) Now, that is heavy money by any broker
    institution standards. You don't guarantee that sort of things for
    pitiful returns or if it eventuate!

    Now, read this paragraph under automotive review in the
    investor presentation.

    "A typical engine plant with a capacity 400k units pa and with
    royalties achieved in marine sector US40-$50 per unit represent
    US $16-$20 m pa in royalties."

    When I first read this, I was confused by the reference to marine
    in an automotive review and the royalties numbers. Firstly, my
    understanding is that the royalties for auto is often quoted as
    $US20-$US40. Than it dawn on me that Cook is just using the
    marine segment as the kind of royalties that can be achieved for
    the auto segment. But than that is not totally true!!! unless of
    course Cook is referring specifically to the high end of auto
    royalties( V6 and V8 !!!). Now this line of analysis become even
    more teasing when "a typical engine plant,,,,," is also included in
    the same paragraph! I did a quick calculation of the melbourne
    Fisherman high feature plant capacity and it came out to be app.
    324,000 units pa. (400K!!!) I keep asking myself why would Cook
    use an engine plant capacity to illustrate the potential of the auto
    sector unless he has the Fisherman plant in mind when he
    penned the document. Now, why would he suddenly depart from
    the usual "10% of the market will result in $150m royalties" type
    of statement?

    Finally, while the use of the word '"bid" might conjure up
    government contracts it could just as easily be referring to auto
    contracts. ( plural !) The word major was also used in describing
    these contracts. As I said, i wouldn't consider the JP5 as a major
    contract nor would Patterson guarantee a multimillion fund
    raising exercise on a JP5 contract alone. The only other scenario
    is multiple Indian scooter contracts!!!







 
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