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This is why we invested in ASX:FYI

Published 18-MAY-2021 12:48 P.M.


2 minute read

Last week we announced our latest investment - FYI Resources (ASX: FYI).

Today we share our deep dive analysis on why we have invested in FYI for the long term.

Over the last 12 months we have made 9 long term investments into high potential ASX companies.

FYI is our tenth investment and since our initiation note last week is up 24%.

Here is our deep dive analysis on why we invested in FYI:

FYI is in the advanced stages of bringing a High Purity Alumina (HPA) plant into production.

High Purity Alumina (or HPA) is increasingly used in Electric Vehicle (EV) batteries. Some forecasts have the demand for HPA to rocket from the current 40,000 tpa to over 140,000 tpa by 2026.

FYI is currently capped at $173M – and recently updated a Definitive Feasibility Study which demonstrated its project can deliver a Net Present Value of over A$1.3BN.

If you are too busy to read the deep dive, here are the four key reasons we invested in FYI:

  1. FYI is leveraged to the "Battery Metals" thematic. We have done well in this space before.
  2. FYI’s development project is at an advanced stage. FYI’s Definitive Feasibility Study demonstrated an NPV of over A$1.3BN.
  3. Potential Alcoa JV. FYI is in exclusive talks with Alcoa on a potential JV.
  4. FYI has a cheaper and less energy intensive process for HPA production. FYI’s HPA production is cheaper and has less carbon emissions than its peers.

We think FYI is well positioned to bring its HPA plant into a reality over the coming years, after demonstrating all the project's credentials over recent months.

The next stage is financing and to that end, the Alcoa negotiations are a strong positive sign.

Given the surge in HPA demand driven by its use in lithium ion batteries, we are hoping that FYI can capitalise on this over the coming years.

What to expect from Wise Owl

Wise Owl makes around ten long term investments per year in carefully selected ASX companies and we share our analysis on why we are invested and the companies’ progress over the long term.

We do extensive research and due diligence before we make a new investment. In our experience, holding companies for the long term, while they deliver on their business plans, has given us the best returns.

We send updates on all our investments as they evolve over time, and whenever we make a new investment.

Over the last 12 months we have made nine investments in our portfolio.

FYI is our tenth investment and you can see today's new "deep dive" analysis on why we invested here:

We look forward to bringing you more coverage on FYI over the coming months, starting with a today’s detailed research report.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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