TFS Corporation (ASX:TFC) announced yesterday that it has partnered with the Nestle owned Galderma for its pharmacological product range

TFS Corporation (ASX:TFC) announced yesterday that it has partnered with the Nestle owned Galderma for its pharmacological product range. TFC has signed a long term supply agreement with Galderma for US$4,500 a kg of sandalwood oil. However the real kicker to TFC's valuation will be the royalty payments to TFC's 50% owned Santalis Limited. We understand the royalty payments could be $1000/kg for OTC products and $5,000/kg for prescription products. Our $3.20/share valuation of TFC incorporates an oil price of just US$4,140/kg (AUD$4,500/kg) highlighting significant upside to our price target by incorporating the contracted US$4,500/kg oil price and $1000/kg royalty payment into our forecasts. TFC likely to have the only traceable, sustainable ISO certificated pharmaceutical grade Indian Sandalwood Oil in the world with extremely high barriers to entry. An understanding of the opportunity with Galderma can be found at: (VIEW LINK)