asx 200 index deletion, page-15

Hi Kiwilad,

I understand (but do not share) your frustration re: EWC’s share price over the past 5 years. May I remind you that, during this time period, EWC’s share price range was over 60 cents before dropping to around 25 cents, then bouncing to below 60 cents and going down to 40 cents before reaching around 80 cents, then down to below 40 cents, up to 60 cents and now down to just over 30 cents. All in all excellent opportunities for ‘non shorters’ to make good money.

Be that as it may, I think we all understand that EWC management seems to be too optimistic in regards to achieving milestone dates. Nevertheless, recent history shows that, while EWC’s self imposed deadlines in respect of achieving the 120 MW expansion of its Sengkang power plant, were not met, the project was finalized and we now have a 315MW power station. I propose that the same scenario may well be true for EWC’s most profitable projects (Sengkang LNG facility) and we can all factor in a ‘more likely’ date for its commercial operation; perhaps towards the end of 2014.

Given all of the above (ie. share price fluctuation (manipulation?!) during the past 5 year period, the state of construction on the ground (Sengkang and LNG hub, Philippines), as well as the financial ‘master plans’ for the Sengkang lng facility and the Philippines 600 MW power station, the competent person’s interpretation/certification of the Sengkang gas reserves to be released within the next few months, EWC shareholders will be able to profit from a wealth creation period.

Below is my earnings per share (EPS) calculations for EWC’s two major projects:

Sengkang Power Station:
315 MW power station: EPS = US 2.5 cents

Sengkang LNG facility (assuming US$12/mmBtu)
0.5mtpa LNG: EPS = US 5 cents
1mtpa LNG: EPS = US 10 cents
1.5mtpa LNG: EPS = US 15 cents
2mtpa LNG: EPS = US 20 cents