ZSUN: Updated discussion of value and unaudited 1998 Earnings...
"ZSUN news today indicated an EPS of 33/35 cents for 1999. That is very conservative and I would not be surprised to actually see an EPS of close to 50 cents for 99, since they always end up revising their projections upwards, due to the fast pace of expansion.
biz.yahoo.com
When you factor in the world wide expansion of the acquired seminar company and the benefits derived from the synergy between the various companies in the ZSUN group, in terms of additional exposure and cross feeding, a 50 cents EPS is not far fetched.
What's the market saying about PE's? A quick check shows PE for
YAHOO at 1800 and 700 for AOL! "Preposterous! It could not possibly apply to ZSUN", you might say. I am not so sure, since ZSUN is a multifaceted Company with little competition at its level, well positioned in the exploding markets of Asia. Only a handful of Internet related Companies are actually listed on a US stock exchange. This rarity factor clearly should increase the PE.
So, let's be conservative and apply a PE of say, 200, times 50 cents forward earnings, to get a share price of $100.00. As a confirmation, PCNTF, which is in a comparable class, although it is already listed on NASDAQ, projects an EPS of 24 cents for 1999 and is currently priced at $72.80, giving it a 1999 PE of 300. Thus, PCNTF with half my projected earnings for ZSUN and trading at 3/4 the projected target price of $100.00, lends credibility to my short term (6 to 12 months) target.
But, since I am reported as "bubbling with excitement" concerning ZSUN's prospects, let's be more conservative yet and apply the PE of 200 to the average EPS of 34 cents for 1999, quoted from the Company Press release: .34 x 200 = $68.00, or nearly four times more than the current price. Now, if you apply PCNTF's PE of 300 to ZSUN's EPS of 34 cents: 300 x .34 = $102.00 again!
By the way, the audit of ZSUN is being completed and the full set of financials should be tabled within 2 weeks. The documents for the application to NASDAQ listing should currently be prepared and I expect a listing approval within 3 to 6 months.
Reviewing the investors package again today, I found that they actually had published unaudited results for both subsidiaries: Momentum Asia earned $950,000 in 1998, an increase of 600% and Momentum Internet earned $325,000, for a combined total of $1,275,000, or 12.75 cents per share. This exceeds their 11 cents EPS projection by nearly 2 cents or 16%. In addition the assets of Momentum Asia increased some 375% from 1997 to 1998 and the Company carries no debt of any kind. Sorry, it's not your usual BB stock!
When I pick a micro cap investment, I pay extreme attention to the management team, since in 80% of cases, its success or failure will be directly related to the quality of management. Here is the profile of Mr Tobin from the Company brochure:
"ZSUN selected Mr Tobin (53 year old) for his Internet expertise and for his flair in identifying leading edge technologies and services and commercializing them in a profitable manner. He has more than 25 years experience in Asia: Hong Kong, Singapore and the Philippines - in publishing, public relations, marketing, advertising, Government information and the Internet.
Mr Tobin was the former senior communication officer in the Hong Kong and Singapore governments. He reported to the Prime Minister's office in Singapore, advising on domestic and international publicity policies and implementing new strategies in the Ministry of Information. He has spent the last three years developing and marketing the Momentum Internet, Inc. product roster".
Mr Tobin sure sounds like a pretty capable and well introduced gentleman to me and what he has so far done with ZSUN is nothing short of amazing.
Disclaimer: I am not an investment advisor and am not compensated whatsoever by any of the companies on which I report my opinion. This opinion is for my sole use and potential investor should do extensive Due Diligence before taking long or short positions in any stock. My projections could be way off, as I am biased in favour of ZSUN since I currently own 1,500 shares".
Regards, F. Goelo + + +
PS: on GTCI, I have sent a message to the "expert" Yongzhi Yang for him to post a complete summary.
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