GEM Gemfields Group

Gemfields Group (GML): Coloured gemstones' time to sparkle and shine

Edison Investment Research Limited
Gemfields Group (GML): Coloured gemstones' time to sparkle and shine

17-Dec-2021 / 08:10 GMT/BST

 

London, UK, 17 December 2021

 

Gemfields Group (GML): Coloured gemstones' time to sparkle and shine

Record Q4 emerald and ruby auctions, which generated US$37.8m and US$88.4m respectively, took Gemfields' total gemstone auction sales for 2021 to US$239.6m, an all-time high that exceeds the 2019 total of US$200.6m. The results indicate a strong market for coloured gemstones. Gemfields provides investors with unique exposure to this subsector and we have updated our forecasts to reflect stronger gemstone prices.

 

Updating our discounted cash flow (DCF) modelling for stronger pricing, we now calculate a DCF sum of the parts (at a 10% discount rate) of US$502m (previously US$367m). Within that, Kagem's attributable valuation has increased by 42% to US$256m and MRM's valuation by 19% to US$362m. Despite Gemfields' share price having increased by more than 100% this year, our valuation implies further upside potential. 


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Gemfields Group (GML): Coloured gemstones' time to sparkle and shine

Edison Investment Research Limited Gemfields Group (GML): Coloured gemstones' time to sparkle and shine 17-Dec-2021 / 08:10 GMT/BST   London, UK, 17 December 2021   Gemfields Group (GML): Coloured gemstones' time to sparkle and shine Record Q4 emerald and ruby auctions, which generated US$37.8m and US$88.4m respectively, took Gemfields' total gemstone auction sales for 2021 to US$239.6m, an all-time high that exceeds the 2019 total of US$200.6m. The results indicate a strong market for coloured gemstones. Gemfields provides investors with unique exposure to this subsector and we...

December 17, 2021 1 EN
Alison Turner
  • Alison Turner
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Gemfields Group - Coloured gemstones’ time to sparkle and shine

Record Q4 emerald and ruby auctions, which generated US$37.8m and US$88.4m respectively, took Gemfields’ total gemstone auction sales for 2021 to US$239.6m, an all-time high that exceeds the 2019 total of US$200.6m. The results indicate a strong market for coloured gemstones. Gemfields provides investors with unique exposure to this subsector and we have updated our forecasts to reflect stronger gemstone prices.

12/16/21 December 16, 2021 1 EN
Alison Turner
  • Alison Turner
GEM GEMFIELDS GROUP

Gemfields Group - Coloured gemstones’ time to sparkle and shine

Record Q4 emerald and ruby auctions, which generated US$37.8m and US$88.4m respectively, took Gemfields’ total gemstone auction sales for 2021 to US$239.6m, an all-time high that exceeds the 2019 total of US$200.6m. The results indicate a strong market for coloured gemstones. Gemfields provides investors with unique exposure to this subsector and we have updated our forecasts to reflect stronger gemstone prices.

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  • Alison Turner
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Gemfields Group - A new strategic shareholder

We believe the phased purchase of a 26.17% stake in Gemfields by mining holding company Assore International Holdings should be regarded as a vote of confidence in Gemfields’ value proposition. Despite recent share price appreciation, the current price remains more than 30% below our DCF sum-of-the-parts valuation of ZAR4.69/share. Strong results, including US$23.1m at the July/August commercial quality emerald auction, reflect a strong coloured gemstone market. H1 results saw EBITDA of US$43.5m...

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