NEW INVESTORS: *** KYOM PROFITS COULD BE BIGGER THAN I REALIZED ***
Yes, gang, I AM on vacation in Hawaii, but I had a lot of time to think on the 8 hour plane ride and sat right next to a good Chinese friend of mine and we talked about KYOM in depth.
Take a look, the profits could be much bigger than anyone is thinking ... even the CEO is being very conservative.
******** FOLLOW MY LOGIC AND HEY, FIND FAULT WITH IT *******
In fact, I am serious, because I come up with a valuation as high as $20+ dollars per share over the next 12 months.... am I wrong?
I do not mean to hype at all, but this seems reasonable to me.
HERE GOES:
**KYOM** is real intriguing in that while not without risk, the Lottery System that they have developed with the approval of the Chinese Government will net them lucrative profits...
** a 6% cut of every transaction of every lottery they do **
What's even better is that their overhead is only about 1%, which means....
*** 5% PURE PROFIT AFTER EXPENSES ***
This is according to the CEO, who if you remember, was a highly respected International Fund Manager with tons of Asian clients, which is how this whole idea started many months ago.
So in their initial lottery target area of Sichuan Province with a population of 100 MILLION, you have some real interesting facts.
The biggest is you have people who absolutely LOVE to gamble. Yes they are not in the same per capita income but I am figuring only 10 cents per person per week....READ ON....
(btw, asians gamble way more than we do in the U.S.),
the NET PROFITS could be extremely impressive.
HOW BIG WILL THE PROFITS BE?
Let's be CONSERVATIVE and say that when things get rolling, that there will be lottery entries of $10 MILLION PER WEEK
(i.e that's 10 cents per person on average per week...obvously not everyone will gamble, so I am figuring 1 of 10 will gamble and those that do will spend $1.00 per week..... or you could say 1 in 100 gamble and those that do will spend $10 per week. Sound unlikely? Well, China has a much higher standard of living now and remember in the U.S., it is the poor that gamble more than the rich).
OK, so $10M per week x 5% profit = $200,000 per WEEK PROFIT for KYOM
= PROFITS OF $10.4 Million per YEAR
Divided by 8.5 million shares O/S =
EPS of $1.22 per share
x PE of 20 (average for the industry is 28)
SHARE PRICE BASED ON ABOVE = $24.
CAUTION: I could be way off, but one thing I am not off on is that the Chinese are gambling maniacs.
*** Plus guess what happens if their lottery is so successful that the Chinese Government grants them additional licenses in other parts of China? Beijing for instance.
PLUS.... remember that Chinese outside Sichuan Province can play the lottery if they have access to a computer I understand, but I am not even counting those customers at all.
I am only counting those gambling via the public Lottery Kiosk machines that KYOM is installing.
ALSO, remember the Chinese Government already granted KYOM one of 4 licenses in the Sichuan Province of 100,000,000 people as an Internet operator.
And the Chinese Governement loves lotteries as a means of raising money for sports and welfare program.
If everything breaks well, we might have a real winner in time.
Again, please do your own DD. This is a specualtive stock with risks, but a real promising one, imo.
Again, a really nice REWARD TO RISK RATIO.
DAVE (checking in will on vacation)
It's 83 degrees, working on my tan.....will check in....good luck all |
