Ann: Elixinol Global raises A$40m to accelerate international gro, page-44

Active, How are you modeling to get 'very cheap on a multiples calculation', on just 2018 1H basis? CWEB EV multiple would be around 113 and Elixinol EV multiple around 204, would like to know what your approach is.

I ran some 'napkin math' a bit earlier on EV multiple comparison based on projected annualized earnings for 2018 between Elixinol and CWEB. The goal was to see what earnings numbers from Elixinol can produce a EV multiple of 50 or less, CWEB appears to be trading towards something in that range - https://www.reddit.com/r/weedstocks/comments/9hpwee/elixinol_the_sleeping_giant_of_the_hemp_market/e7biy5d

CWEB gave earnings projections for 2018 and 2019 in their listing prospectus, so I used those in the comparison, and just went with a few guesses on possible earnings that Elixinol could finish 2018 with. I see your reply, you're suggesting a 20% quarterly growth in sales as starting point, so 9.5M revenue for q3 and then maybe at the low end based on 20% growth, 11.2M for q4, the question remains at what ebitda margin to use for deriving earnings? Elixiniol 2018 1H ebitda margin was effectively 5.3%, can’t really project out based on that, would need to assume they improve their margin against those projected revenues. Rather than get hung up on making that work for sake of napkin math model, I just ignored margin and revenue and assume they work out to the final ebitda estimates to complete a projected multiple.

Of note though, for peer comparison of operations efficiency, looking at CWEB’s prospectus, they state their current and projected ebitda margin around 30-35%.

for those that glossed over, but still interested, it all boils down to:

’Can Elixinol produce around $5.6M AUD ebitda or more for 2018 2H ?’

If their Q3 report supports a trend towards a minimum of that, then their market cap is undervalued, sits around 35X EV multiple, investors would likely bid up to 50X quickly, 50X is about where CWEB is at right now if they deliver at the low end of their ebitda projections for 2018. Just one opinion, I respect others due diligence and appreciate comments, thanks!