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Lebed.biz Alert – CHGY hits $3.60 up 300%! Unbelievable!
Posted on 07 April 2010 by admin
Very few stocks are up 300% since July 13th 2008! The Dow Jones is still down 2% from July 13th 2008 until now, so discovering a stock that gained 300% since then is incredible!
Here is my original alert on CHGY:
Lebed.biz Alert - My new huge China energy play!
Sun, Jul 13, 2008 12:35 pm
My new HUGE China energy play is... China Energy Corp. (CHGY).
Despite it's name, I consider this to be the most overlooked China energy stock in the market today.
CHGY is one of the top 20 coal miners in China. At it's current share price of $0.90, CHGY has a market cap of only $40.5 million and a trailing twelve month P/E of just 12.
If you take CHGY's net income during the past two quarters of $3 million and annualize that number to $6 million... CHGY's real P/E right now is only 6.75.
CHGY's revenues have been skyrocketing. 1Q 2008 revenues were $7.7 million, up 75% over the same quarter one year ago.
CHGY's 2Q 2008 results are due out this week and I believe they could potentially report a blockbuster quarter.
Coal prices in China have been soaring. CHGY's weighted average coal price has risen from $10.46 per ton in 2003 to $24.88 per ton in 2007.
Prices are up substantially again in 2008. Based on last quarter's results, I estimate that CHGY is now selling their coal for somewhere around $40 per ton.
CHGY's current coal production capacity of 500,000 tons per year is expected to grow to 1.2 million tons per year by 2009. At a sales price of $40 per ton, I am expecting their coal revenues to conservatively grow to around $48 million annually.
CHGY also has a heating business that has a monopoly in the XuanJiaWan district of China. I am estimating their heating business will add another $12 million or so in annual revenues moving forward.
Therefore, I believe it is possible CHGY will generate $60 million in revenues in 2009.
CHGY's net margin for the past two quarters has been around 20%. Assuming their net margin remains here... $60 million in revenues could mean $12 million in net income.
If we look at the leading US coal companies... BTU has a trailing twelve month P/E of 89 and ACI has a trailing twelve month P/E of 42 and they are experiencing nowhere near the growth CHGY has.
If we were to be conservative and give CHGY a forward P/E of 20 based on potential $12 million in 2009 net income... we are looking at a market cap of $240 million.
With 45 million shares outstanding, that would value CHGY at $5.33 per share.
Please remember, I am making a conscious effort to be very conservative with my outlook. It is likely coal prices in China will continue to rise substantially higher.
In fact, there is a major shortage of coal right now in China. Last week it was reported that insufficient coal supplies led to the government shutting 2.5% of it's coal-fired power plants: http://www.bloomberg.com/apps/news?pid=20601080&sid=aiyKnEEj9qZ0
I am not an analyst and I am not making any financial projections or target prices for this stock. Please do your own research and make your own investment decisions. Never invest based on anything I say.
Lebed.biz Alert - My new huge China energy play!
Sun, Jul 13, 2008 12:35 pm
My new HUGE China energy play is... China Energy Corp. (CHGY).
Despite it's name, I consider this to be the most overlooked China energy stock in the market today.
CHGY is one of the top 20 coal miners in China. At it's current share price of $0.90, CHGY has a market cap of only $40.5 million and a trailing twelve month P/E of just 12.
If you take CHGY's net income during the past two quarters of $3 million and annualize that number to $6 million... CHGY's real P/E right now is only 6.75.
CHGY's revenues have been skyrocketing. 1Q 2008 revenues were $7.7 million, up 75% over the same quarter one year ago.
CHGY's 2Q 2008 results are due out this week and I believe they could potentially report a blockbuster quarter.
Coal prices in China have been soaring. CHGY's weighted average coal price has risen from $10.46 per ton in 2003 to $24.88 per ton in 2007.
Prices are up substantially again in 2008. Based on last quarter's results, I estimate that CHGY is now selling their coal for somewhere around $40 per ton.
CHGY's current coal production capacity of 500,000 tons per year is expected to grow to 1.2 million tons per year by 2009. At a sales price of $40 per ton, I am expecting their coal revenues to conservatively grow to around $48 million annually.
CHGY also has a heating business that has a monopoly in the XuanJiaWan district of China. I am estimating their heating business will add another $12 million or so in annual revenues moving forward.
Therefore, I believe it is possible CHGY will generate $60 million in revenues in 2009.
CHGY's net margin for the past two quarters has been around 20%. Assuming their net margin remains here... $60 million in revenues could mean $12 million in net income.
If we look at the leading US coal companies... BTU has a trailing twelve month P/E of 89 and ACI has a trailing twelve month P/E of 42 and they are experiencing nowhere near the growth CHGY has.
If we were to be conservative and give CHGY a forward P/E of 20 based on potential $12 million in 2009 net income... we are looking at a market cap of $240 million.
With 45 million shares outstanding, that would value CHGY at $5.33 per share.
Please remember, I am making a conscious effort to be very conservative with my outlook. It is likely coal prices in China will continue to rise substantially higher.
In fact, there is a major shortage of coal right now in China. Last week it was reported that insufficient coal supplies led to the government shutting 2.5% of it's coal-fired power plants: http://www.bloomberg.com/apps/news?pid=20601080&sid=aiyKnEEj9qZ0
I am not an analyst and I am not making any financial projections or target prices for this stock. Please do your own research and make your own investment decisions. Never invest based on anything I say.
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My firm Lebed Biz LLC was compensated by a third-party (Maxim Capital) $20,000 cash for a one-month CHGY investor relations contract which has since expired. We could potentially be compensated more for providing investor relations services regarding CHGY in the future, although no agreements have been made at this time. Never invest into a stock we discuss unless you can afford to lose your entire investment. For our full disclaimer go to: www.lebed.biz/disclaimer.htm
Jonathan Lebed
Lebed.biz
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Lebed.biz
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