I would like to get other's thoughts on the following quick calculations I've done. Just for the sake of disclosure I have a long position at $7, which I opened right before the most recent slide.
Their current p/e is near 27. In the last earnings statement the company's guidance for 2008 was for revenue of about 100mil USD. That is an increase of about 30% from 2007. However year over year, their expenses have also increased about 30%. Thus in the worst case scenario their revenue increases in line with their expenses and their p/e remains flat. The best case scenario that I see is that their expenses remain constant along with a 30% increase in revenue, which would imply a 30% increase in profit. Ignoring the increase in taxes that would result this implies that their f p/e at the very best is around 19. This doesn't seem like much of a bargain to me, and given current market conditions this could very well cause a further major slip in the price at their next earnings report.
The earning per share for the 1st qarter of 2008 ended on september 30, 2007 is US$0.21, with 30% growth rate annually, about 8% increase for each qarter, then 2nd qarter is about $.23, the 3rd, $0.25, last qarter,$0.28. Adding them up, the total earning per share for the fiscal year ending on June 30, 2008 is $0.97. Then the PE is $6.07/0.97=6.26, which is much lower than what I told you. The following is part of the copy of the 1st qarter earning report:
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Noah Education Announces Results for the First Fiscal Quarter Ended September 30, 2007 Monday November 19, 5:00 pm ET
SHENZHEN, China, Nov. 19 /Xinhua-PRNewswire/ -- Noah Education Holdings Ltd. ("Noah") (NYSE: NED - News), a leading provider of interactive education content in China, today announced its unaudited financial results for the fiscal quarter ended September 30, 2007, which is the first quarter for Noah's fiscal year ending June 30, 2008.(1)
Highlights for the Fiscal Quarter Ended September 30, 2007 -- Total net revenues increased by 40.0% year-over-year to RMB247.5 million (US$33.0 million) from RMB176.8 million in the first quarter of fiscal year 2007.
-- Net income increased by 39.4% year-over-year to RMB44.5 million (US$5.9 million) from RMB31.9 million in the first quarter of fiscal year 2007, and net income excluding share-based compensation expenses and the change in the fair value of warrants (non-GAAP) increased by 63.3% year-over-year to RMB52.1 million (US$7.0 million).
-- Basic and diluted earnings per share were RMB1.58 (US$0.21) and RMB1.50 (US$0.20), respectively. Excluding share-based compensation expenses and the change of the fair value of warrants (non-GAAP), basic and diluted earnings per share were RMB1.85 (US$0.25) and RMB1.83 (US$0.24), respectively. Each ADS represents one ordinary share. The weighted averaged ordinary shares outstanding in calculating basic and diluted earnings per share were 21,473,442 and 21,687,452.
In their 1Q08 earnings report , period ending 9-30-07 ( Fiscal year 2008 begins 7-1-07 and ends 6-30-08 ) , NED reported U.S.$0.20 / diluted share and U.S.$33 million net revenue .
The analysts are estimating U.S.$0.36 for 2Q08 period ending 12-31-07 .
The analysts are estimating U.S.$0.73 for 3Q08 period ending 3-31-08
The company has forecast U.S.$96 to $97 million net revenue for fiscal 2008 .
Adding it up : actual ' eps '____________________1Q07___$0.20 __________________________________est.__2Q07___$0.36 __________________________________est.__3Q08___$0.73 No analyst est. avail./average of previous Q's ______4Q08___$0.43
Where do you get that from? I'm reading their current income statement on Scottrade. They list 9.1 mil in net income minus a 2.8 mil adjustment for 12 months with date ending 6/30/2007. With a total of 36.7 mil outstanding shares that is an earning per share of 9.1/36.7 = 0.17 cents per share. At a price of 6.07 that is a p/e of 6.07/0.17 = 35. I actually used the number off google, which has their latest quarter included. This makes up for the 35 vs 30 difference from my first post.
Where do you get 8 from. If that is the case, this certainly is undervalued!