Four Corners "Big Fish" This monday, page-61

There is also a technique of pumping oxygen directly into the optimal depth to increase the DO.

SBP as someone suggested earlier plays a big role in MH adaptation. The fact that Tassal's leases in MH have even higher survival rates than the rest of the state means their risk mitigation strategy works even during El Nino the past two years where there is lower rainfall and hence lower DO.

However I can see TGR correct higher very soon as fundamentals point that way
1. We are likely to see the current La Nina persist as confirmed by CSIRO and that will help Tassal's fish grow even faster as there are more atmospheric events.

2. Chile and Norway's supply constraints will keep prices up and together with bigger fish, the value of live salmon will increase. Tassal's FY17 harvests might have slightly higher cost per HOG due to FY16 summer where they needed to feed the fish longer to obtain 5kg plus HOG, but with prices 45% higher now than they were in 1H17, I see an improvement in margins.

3. De Costi's will generate even more earnings as the flow on effects from integration comes through

4. The SGARA uplift that turns operating profits into statutory profits takes into account forward pricing of Salmon HOGs and with Chile's production capped at 3% from 2018 onwards, and Norway's supply falls as they brought forward harvests already due to sea lice, I see an uplift in forward curves.

Target price in 2 -years is unchanged at $6.00

Cheers,

Ninja Tuna