Thread by @puppyeh1

Thought exercise - what is the right price for an Indonesian coal shitco in the current environment?

Geo Energy ($RE4.SI) trades in 🇸🇬, at 32c has a $330mm USD mkt cap. Per recent PR, has $60mm cash, no debt. So EV is $270mm.

Its currently making $40-50mm EBITDA per MONTH...

...assuming $80/t-$100/t benchmark coal pxes (benchmark is ICI4, the crappy Indo thermal coal grade).

For perspective - in 1H they did $78mm in EBITDA w/ pxes in the mid-40s/t.

Current ICI4 px is $117/t. That is batshit stupid...

But at pxes 65% lower this is on 1.6x EV/EBITDA

And printing 15%+ of its market cap, in cash, EVERY MONTH.

As I said, there is no debt. I have no clue what coal prices do.

Absent HORRID capital allocation what is this worth??

They just called all their USD bonds and said they'd consider a buyback (seems good to me). I assume the div goes vertical. Maybe some smart Indonesian is buying it (look at the chart).

I honeslty am flummoxed. I realize there are lots of these out there.

But Indo coal is also structurally interesting given the Aussie coal ban into China (not ending anytime soon).

Seems a huge margin of safety to me at this px (again absent some horrible cap allocation).

Contrary views welcome. I have a tiny position. DYODD.