re: carbon credits. Research how they work. I do not believe SP movement has had much to do with this. In April this year I asked GTP..
"I know that plantation timber will only have limited carbon sequestation capability between the time that the tree is relatively mature and when it is harvested. As a general rule, if GTP was say, incorporated in a Kyoto signatory country, would its plantations qualify for the carbon credit schemes?"
The answer was that there is opportunity for the company, however it is still to be determined how this would all work. It would be unlikely to generating anything much in the way of revenue over the foreseeable future, and would definitely not replace the primary purpose for planting i.e. woodchip production for the pulp and paper industry.
to quote:
"The landholder holds all of the cards (and obligations) when it comes to carbon credits i.e.100 year liability to maintain a bank of carbon equivalent to the one sold, which means maintaining enough standing trees to sequester carbon emissions from the atmosphere equal to the amount you sold for 100 years - a hard concept when the ultimate aim is to grow plantation timber to be chipped and used to manufacture paper."
Come back to the $7000. Notwithstanding margin pressure, if it wasn't for MIS schemes, would the land be this valuable? If they were liquidated tomorrow, would the land still be worth $7000? In 10 years time when its rotated with a new harvest, will it be worth $7000?
We know forestry from a tax concession perspective now has certainty. We know GTP only buy land because next time around they will not have to. We know that they have some time to go before they have enough land in their bank to rotate 35000 ha per annum which is their stated aim.
GTP are like a positive gearing property fanboy who has read too many Steve McKnight books
but when they do reach this rotation milestone, their capital expenditure will drop hugely.
In the meantime ask yourself how well the market is going to react to the inevitable fact they they will need another large sum of money to buy more land - whether by debt or equity dilution..