NandinaI guess the market in general is waiting to see if the...

Nandina

I guess the market in general is waiting to see if the deals with China (estimated US$40M pa for the next 5+5 years) and Vietnam (US$60-80M pa) actually deliver cash in the bank or just hot air.
Until the money from these spectacular deals starts to show up in ETC's bank account the market will remain sceptical - but when that does happen there will be a major re-rating of the company. That re-rating should shift it from the current 4X PE ratio to something in excess of 10.
Following yesterday's announcement of the start of printing the security cards for the China National Gas Tank project and reiteration of the A$48M NPAT estimate for FY09, a major broking house issued a price traget of 0.71 cents (including a hefty discount for execution risk). When the money from this China deal starts to show up in ETC's bank account, that discount should largely disappear. And when that happens we should see a valuation in excess of $1.00.