Ok, makes sense to put it all here. Lots of wonderful info everywhere, and after this operational update, let's put all our hive mind to analyse the future for AEB: opportunities, risks, forecasts (and yes, I don't mention feelings, it's not that useful):
Change: Looking at past, present and future and the pivotal moments for AEB
A change in industry direction, from biofuel/ algae the business is pivoting to medicinal cannabis/ Hemp: it can be seen through investments, responses to Q&A and updates.
- that change is so obvious, Asx has issued a notice to AEB about re-qualifying their industry (part of yesterday's update) Business like BDA are falling over themselves to be reclassified, so it's a good sign it's the other way around
- SP has been much higher, that means the potential to come back to prices the market has already seen before.
SP high a high of 0.542 Back in 2012. Volumes were lower, but is the company now better of than then? Long term this is good.
Now short term, you had a plateau at about 0.06. Now this is also very good, and at 0.02 that definitely made me consider entering.
Look at when volumes and direction of SP is moving? It's since they're reorientated the business into MC.
Medical cannabis and hemp, are hugely synergistic with their existing business. Without MC, I wouldnt be a AEB shareholder, and I'm not the only one. Not only it's a huge industry still extremely young, but the synergies for AEB are huge. That's meaningful change right there.
The management also is changing. Mal is doing a great, his communication to shareholders, down to thanking us new shareholders, his Q&A, the logical direction of investment in crop/ genetics / MCL, mean AEB could actually leapfrog in a few areas.
Industry:
AEB can technically play in:
Biofuel (Hemp biofuel, potentially hemp + algae super biofuels)
Fibers (from hemp , potentially bio food, compost)
CBD - from hemp / or MC crops
Full MC with CBD. THC and whole plant extracts
Cattle feed: This is potentially a game changer because of the CBD this would pass on to cattle and make the MUCH MORE HEALTHIER. Mammals have endocannabinoid system, cows and so on would become more efficient, less rubbish to pump in them.
Cannabis genetics and profiling: MC strains are complex, and various strains have various mix of cannabinoids terpenes, and so on, that actually generate different responses. This field will be very important in the future, as MC becomes mainstream and results need to be working for most to be accepted. aka right strain, right posology for each treatment. Now, they had it right in the 50s, so it won't be that complex, it's just that expectations are greater.
Also synergistic with MCL which has a rich seed bank.
Super food HEMP mix: Adding CBD or hemp into other super food powders, to create the ultimate superfood powders. We know the clean / healthy food trend is not going away, quite the opposite. They could provide gencor some really good stuff anad I'm sure Gencor is aware people want hemp / cbd in their diets (early adopters at least)
Hydroponics: this is also a growth sector, whatever expertise they may have could be sold. RGI to me (which I hold obv.) is the best hydroponics play in the ASX (machinery, software and expertise/nutrients)
Finance:
Public capital raise: Update says AEB has exhausted its capacity under 7.1, aka safe for investors fearing further dilution.
Private capital raises: Like the one announced, great outcome. I don't think you invest in AEB with options at 0.04 to sell at 0.05. This will help provide enough for AEB to really lift off.
Revenue is coming in, gencor buying the offtake in algae production is great. Don't remember the amount like 1 million of something.
So pressure on raising capital is about to ease. Great sign the company has more than stabilized, and is actually preparing a hard bounce.
Overall MC industry:
It's a booming sector with a 10 years horizon looking at USD 250Billions globally. Potentially $500 B in my own estimates.
Small companies either become decent players and giants of the future, either they get bought out. Either way, it's a great outcome for shareholders.
MC licence usually valued at 10-30 Million by market (explaining why small businesses have even increased chance to get bought out as is, as bigger players may want to "buy" licenses as a mean to step up production)
Summary: Management doing what 's right, slight shakeup but pivotal new strategy on hemp/ MC which is extremely synergistic with their existing business and skillset. Positioning in huge growth industry, tons of business opportunities which are quite unique for AEB vs. others Asx plays (e.g. hemp biofuel) and hopefully, the same way market wants QBL to ditch old business and seize MC by the horns, I'd venture that the market would want AEB to focus on MC.
I'd predict a price range between 0.1 and 0.5 within 5 years. Yes that's 20X for me. and 10X for people jumping on at 0.05.
Obviously my portfolio speaks for itself - entered Mid to late 2017-. I'm still an early investor, this is only the beginning.
Add your own analysis, Maybe less messy than mine. Let's go.
AEB Price at posting:
4.8¢ Sentiment: Buy Disclosure: Held
