2012: Sales: Non-nuclear 45,000 tons @ $3000 per ton = $135,000,000 Nuclear 2000 tons @ $15,000 per ton = $30,000,000
Net earnings: Non-nuclear. (net margin 15%) $20,250,000 = $.68 per share @ 30m shs. Nuclear. (net margin 35%) $10,500,000 = $.35 per share @ 30m shs.
Total net earnings per share = $1.03
2013: Sales: Non-nuclear 60,000 tons @ $3000 per ton = $180,000,000 Nuclear 4000 tons @ $15,000 per ton = $60,000,000
Net earnings: Non-nuclear (net margin 15%) $27,000,000 = $.90 per share @ 30m shs. Nuclear (net margin 35%) $21,000,000 = $.70 per share @ 30m shs.
Total net earnings per share = $1.60.
1. Assumes 100% capacity on older facilities and 50% capacity on newer facilities for non-nuclear in 2012. 100% capacity on all non-nuclear in 2013.
2. Revenue per ton on non-nuclear is a guesstimate based on current revenue and the tonnage figures given in the power point presentation. I believe my assumption of $3000 per ton is very conservative.
3. Revenue per ton for nuclear is the low end of what is given in the power point presentation.
4. Net margin for non-nuclear is based on comments and figures in the power point presentation.
5. Power point presentation says around 50% gross margin for nuclear. I use 35% net margin.
6. If, as expected, CHGI buys a graphite mine, the above margins should significantly increase.
7. Some commentators think that the price of graphite will skyrocket. Nevertheless, I assume no year over year increases in the price of graphite.
8. I assume 30,000,000 shares even though there are currently only about 23,000,000 fully diluted share--and despite the fact that CHGI indicates it can fund all future operations without dilution.
Has anybody read this publication CHGI filed with the SEC this month? I thought this was a real company owned and managed but in reading the first 15 pages or so it looks like it is just being run on paper with contracts and the risks are numerous and potentially devastating. What an I reading wrong?
Thanks for the kind words dagger. I am enthusiastic about China Carbon Graphite and I have "put my money where my mouth is." At the same time, I try to be realistic, and even understated, about my expectations for the company.
If you think, after reading the power point presentation and other material by and about CHGI, that my projections are reasonable, think what that means for the future price of the stock. If the anti-China hysteria abates (which it seemed is already beginning to happen) and a reasonable price earnings of, say, 8x is assigned to CHGI, consider what the price of a share will be in a couple of years.