MLD chart, page-36

Yeah from a fundamentals perspective the valuation at 89c seems all wrong. Perpetual seem to be desperate sellers.

2018 FY (ending June 18) had margin in the 1st half of 8.5% and 7.7% in the 2nd half (well down on FY17). This results in an EBIT of $33.7M for FY18.

2019 1st half we have been told we will make between $7-9m NPAT which I'm using $8m and have an EBIT of $12.6m for the 1st half (down from $15m H1 FY18.

If you work back based upon the Downer suggestion of 10-11 times EBIT based on Macas market cap, you'd have an EBIT of between $21.7m and $23.8m which would suggest that the 2nd half would be worse than the 1st half (not suggested in the communications from MLD). It would assume on 10 times EBIT of $11.2m and on 11 times earnings just $9m.

FWIW my forecast is for $32.2m (I've assumed a slightly better margin of 8% compared to 7.7% H2 FY18) but with greater revenue $320m versus $277.6m, which results in EBIT only being down on FY18 by about $1.6m.

At 10 times earnings that's a market cap of $321.8m ($1.20 / share) and at 11 times earnings $354.0m ($1.32 / share).

I guess it all depends on whether you believe management, a couple of downgrades in their estimates doesn't help so they need to achieve the half year result of $7-9m else the market will likely ignore statements from MLD and push the price down further. I'll believe them and hold for 50% upside to current levels.