Amazing still, there is barely any market coverage on this thing. Hardly any units traded, though the buyers are starting to stack up nicely. Like myself, the holders are clearly long termers.
When the rest of the market wakes up and realises the potential of this company, then we'll see a serious stock grab.
You'd expect the growth potential of RQL to see it on a p/e of 15x-20x year on year (yoy) when the market is across it. Right now, it's sitting on 10x p/e ($80Mil cap).
However, given that profits will probably double yoy for a few years, price and p/e may potentially double, triple, quadruple, imo.
If FY11 NPAT is $12-$16Mil, RQL will then be sitting on a p/e of 5x (capped at $80Mil). Though, as indicated by the AGM we may see a cap raising of roughly $15Mil-$16Mil, and hopefully the raising isn't too far away from share price to prevent dilution. Could therefore see it capped at $95Mil, however still cheap if a FY11 NPAT comes through.
Even on a market cap of $95Mil-$100Mil, the company will only have a p/e of 6.25x. With foreseeable exponential growth, the market would have to put on a p/e of anywhere between 15x-25x, expansion of operations domestically and internationally and profits, the share price could easily double, or triple or be a 10 bagger by FY14 if profit expectations are up by 50%-100% yoy for 3-4 years.
DYOR.
RQL Price at posting:
51.5¢ Sentiment: None Disclosure: Held
