Tom: you point out:
"one of the most interesting things found was the size of the entire plate market.
1995 1998 2000
CTP 1.4 10.5 34.5
non 141.8 144.5 132.8
tot 143.2 155.0 167.3 (in mill sq m)"
This is a huge overall market where CtP only penetrates 20%
by year 2000. And if you notice quite a few a projected to be available in 2 years."
And than you ask
"Whose market growth is this 10.5 to 34.5"
You have hit a key point. If total plate sales in 1995 were 1.6 billion, as per Neil and total production is expect to grow 17 % in
three years, than total market in dollars will be approximately 1.872 billion dollars. THAT GIVES A TOTAL MARKET SIZE FOR CTP PLATES OF APPROXIMATELY 370 MILLION. Adjust for the increased relative cost of CTP Plates and you get $500 million. We know Presstek plates are limited to short runs, and not suitable for many aspects of digital printg (newspapers, magazines etc, so assume that there market is 60 % of the digital plate market (probably high) and you get a TOTAL POTENTIAL MARKET OF $370MM FOR PRESSTEK (probably high. Assume further, that PRST is wildly successful and gets 50% of the market, PRESSTEKS TOTAL PLATE SALES IN THER YEAR 2000 WOULD BE $185 MILLION. Assume further, that Prst can increase its margins from 35% to 50%, and you get a gross profit of $92.5 million.
Assume overhead and sales of 30% (substantially less than today in percentages), and get $37 million of pretax operating income,use 35% for taxes and you get $24.05 million net. or roughly $1.60 a share
with a 50% market share from plate sales. Say equipment sales and royalties contribute $10 million gross profit or $6.5 million net.
And you get a total of $31 million net, or $2.04 per share in 2000.
THUS USING THE MOST OPTOMISITC ASSUMPTIONS, PRST WILL EARN $2.04 A SHARE IN THE YEAR 2000. USING A P/E OF 20 IN THE YEAR 2000 AND YOU GET A PRICE $40.80 A SHARE.
THE LONGS WILL LOSE ALMOST 52% IN 3 YEARS USING THE MOST OPTOMISTIC ASSUMPTIONS.
This is with no risk adjustment for the SEC, technological obsolesence, and allowing for a 30% increase in margins.
I can't get short enough!
Neil: Using the INDUSTRY PRODUCTION FIGURES, what is your estimate of market size in the year 2000?
The previously used method of extrapolating yields forecast sales larger than the total market, thus are clearly incorrect. |
