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1.43%

7.1¢ 99 wuxian limited

Ann: 99 Wuxian delivers significant revenue and profit growth, page-10

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haiwaixiaozi

27 Posts.

28/02/15

19:38

Post #: 14837732
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Originally posted by JBaker12 ↑

On a good day foster's research is average so I would take any of their numbers and valuations with a grain of salt. They value this one mining stock on an EBITDA basis even though it has no production history and they haven't delivered a DFS on their new mine. To give a good target on NEA they say it should trade at a 50% premium to the tech sector just because they like the company a lot.

I like this company and its tech a lot, it may even be one of the few Chinese companies which aren't completely dodgy. However at the surface this result wasn't overly good particularity when compared to Foster's inflated estimates. NNW trades at EBITDA multiple of 103x (1070m shares @$0.31 on $3.2m EBITDA). This company could double its EBITDA each year for the next 3 years and then still trade on a 15x multiple. It should be a surprise that the company sold off and it will probably take a few big things to get the SP going again. To invest today one would have to be extremely confident the company could grow at exceptionally high levels for 5 to 10 years. Even this company has profits, its still a blue sky investment at the current SP.

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What is the normal P/E for this sector?

NNW Price at posting: 31.0¢ Sentiment: Buy Disclosure: Held
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