hi idoke, I always appreciate your post and i would like to know what do you think of the recent run up of MHJ and the general situation of man sang. What do you think the company will do with the fresh money they get form the placement? do you know how the selling of the shop in CP&J is going? do you have any idea of the future prospective of the company? thank you very much and have a good weekend
On the face, the stock doesn't look so cheap any more. Until now I hold it mainly because: 1 - The parity with 938.hk 2 - The pearl city project
Last week MHJ was up nicely, so the parity is a little more than 20% now, which is not as much as it used to be
As for the pearl city - In April 0938.hk bought 6% of the project for 60 Million. So their previous 49% share should worth 490 million, which is about 400 million more than they report in the books. If I reduce the ZhuJi project and the cash from the market capital of 0938, we get P/S of almost 2. This is not so cheap
Of course, there is still 20%+ parity and there is the possibility that they bought the 6% part at a big discount to its real value, but this is something I don't want to speculate about.
Usually I sell way too early, so I might wait a little, but the bottom line is that I can find cheaper stocks in HK now.
Using Idoke's methodolog 6% of the CP&J cost MHJ US $7,692,308 so 55% of CP&J looks to have a value of US $ 70,512,823 also from the Placement there was $36,000,000 in proceeds so that = $106,512,823 of which MHJ owns 41% (after dillution) = $43,670,000 plus yahoo says MHJ has $40,000,000 in cash at last reporting and I don't think they had time to spend it yet.
So that gives us $83,670,257 divided by 6,300,000 shares outstanding = $13.28
Does this make sense I'm computing book value using only 3 values; MHJ's latest amount of cash at last reporting, plus 41% of the cost or current value of 55% of CP&J, plus the $36 Million from the placement. All else is asumed to have zero value.
The real question is earnings. What are the projected earnings for MHJ in 2008-2011, and beyond, due to the CP&J project (which is scheduled for completion in 2011)? How confident can we be of the success of the project?
MHJ said there was a line-up of prospective buyers/leasors for Stage One, due to open within six months. There was also some research work by HK analysts back in March 2007.
Beyond that, if anyone has any additional info or research to contribute, it would be greatly appreciated.