I am not a financial expert nor is a brake mechanic however one...

I am not a financial expert nor is a brake mechanic however one saying that normally holds true the world over is “build a better mousetrap and the world will beat a path to your door”. I truly believe that these SIBS brakes for a number of yet unknown applications are a better mousetrap. I think the potential is enormous for ABV for the truck brakes and to the point the enormity may even be a little too overwhelming for ABV to contemplate implementing.

All as I see at the moment is fantastic market opportunity numbers so if the company was able to just get a fraction of what is out there it would be a company maker in its own right as far as my investment is concerned and the future of ABV itself.

The current mining business pretty much “give or take” a few hundred thousand dollars spent on R&D here and there is breaking even. The revenue generated supports the costs of running the business, paying wages, keeping the lights on and covering operational expenses in its own right. There is no “earnings” because all profits from revenue are being allocated. The market is currently finding it difficult to value the company higher because it cannot value the company easily with no EBITDA data and thus how does the market then work out an appropriate P/E ratio and market capitalisation.

In the ASX announcements, ABV has stated that each truck brake set should sell for around $25,000. Now I have no idea what the costs are attributed to ABV for each brake set so I am just going to say the net margin is $10,000. The actual figure could be more or less and I am only going to work with supposed scenarios because I do not know the real commercial numbers.

In Australia there are 800 sales of new trucks to which Ken has stated ABV would likely get 400 per year or 50%. The installed fleet is 8,000 trucks and Ken has stated ABV would likely get 25% or 2,000 truck retro-fits which is the current market share in mining SIBS brakes. So that is 2,400 brake sets. Now I’m not going to use those figures because I am going to be pessimistic and say only 100 new brakes and 15% of retro-fit market which is 1,300 brake sets. So 1,300 by a margin of $10,000 is $13,000,000 in earnings. $13m by P/E of 15 is market cap of $195,000,000 or around 17 cents a share on 1.1b shares. Remember, I am only working with a net margin of $10,000 with $15,000 allocated to tax and operating and manufacturing costs to achieve the sale price of $25,000 each.

Then we look at the US market and we’re only looking at garbage trucks, not busses, not military or NATO vehicles and fleets, not aircraft landing gear to reduce brake fade on take-off aborts, not taxis, logging trucks or trailers or any other potential applications…. So 10% of the 200,000 installed fleet in the United States is 20,000 trucks… but you know, I am going to be so pessimistic and deranged to say they only manage to sell not 10% but only 5% of the US market… or 10,000 retro-fit trucks (given ABV’s estimate is 25% or 50,000 trucks). For new trucks sales there is about 20,000 a year, so 15% of those is 3,000 brake sets giving a total of 13,000 brake sets. 13,000 by $10,000 earnings per set is $130m by a P/E of 15 is market cap of $1.95 BILLION plus the $195m from Australian market gives $2.2 BILLION market cap or $2 a share.

Now of course in time ABV might start fitting these brakes to the European market garbage trucks which is just as big as the US market or elsewhere. They might also fit them to every NATO truck to reduce heat signatures and that wet sealed brakes don’t fad from heat as well as they can go through mud and water without brake fade. See video on ABVs website on this when tested on a Land Cruiser. How big that market is, is anyone’s guess. Then if these brakes went to the bus market which is substantially bigger than the garbage truck market well I wouldn’t even like to predict. Share price would likely be well over $5 IMO.
So hey… do I mind buying a few million shares at between 1.6 and 2 cents a share? Hell no….

250 truck brakes WORLD WIDE at $10,000 margin giving a market cap of $37.5m should see the share price at 3.5 cents….

Bring it on BubbaGump….