WA Kaolin Ltd - Research Report July 2021

We have looked at valuing WA Kaolin a number of ways, including NPV, PER, and peer comparison, and with each measure, we come up with a valuation range of between A$0.30/sh and over A$1/sh. The valuations are sensitive to a range of factors, but we believe the factor most relevant to driving the perception of value is the rate of sales volume growth (ie announced contracts), and the implications for future expansion.

Our price target of A$0.60/sh is based on where the share price will be in 12 months time, that is by the middle of 2022, with the Stage 1 plant operating, and the market getting a sense of how quickly the company will grow. Both NPV and PER valuations will be determined by perception of the timing of Stage 2.

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