Ann: June Quarterly Report & Appendix 4C, page-14

John, with Sales an GP growth rates running at above 30%, all disclosed targets were met.

If you have followed this company management since listing, you will note that they have incredibly high expectations. I believe the risk in AU8 is that it rushes its business plan striving too high too fast.

This remains my greatest concern. From a nominal annualised turnover of $4m turnover to $28m in only 9 months is quite incredible, and unsustainable without increasing risk. Cash flows have not stabilised yet, but expansion plans across may platforms are in full swing.

As far as market cap is concerned, the CR at 45c put a significant amount of value into current liquid assets reducing the risk for all shareholders and adding substantial NTA into the valuation.

My quite large current holdings are mainly free carry with some big purchases a week or so ago below 20c. I was fortunate enough to sell most of a very big line in the "boom" when the price rocketed from 14c to above 70c. Now that was when the MC was crazy. Not now that GP appears entrenched above $1m per quarter.

I can only recommend the company slow down its growth, not ramp it up and diversify into other capital cities. I suspect this will not happen as the business is very Sydney centric and probably has little confidence in managers outside of their home turf.

Chinese trust once earned is like gold but until earned is like water.