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Non-Tech : Berkeley Technology Limited (BLKYY) -- Ignore unavailable to you. Want to Upgrade?

To: J. Conley who wrote (224)	3/26/2000 9:23:00 PM
From: J. Conley	Read Replies (1) \| Respond to of 955

Some comments on the 3/16 report by Bear Stearns: (pre-split prices) The $200 price target was not necessarily obtained by giving a conservative 4x multiple to their previous projected BV of $50. I previously speculated they might give LDP at least a 4x, to reach $200 since other like companies in their previous report were 8x to 30x. What is impressive in the report, and in my view even more positive than the simple multiple expansion, is the fact that Bear Stearns is very impressed with the private equity portfolio and apparently believes it to imply a $100.00 per ADS net asset value. I don't think it is clear whether this is a estimated value for the private equity alone, but if it were, I don't think it is out of line, for that would be an 8x to 10x multiple on the private equity (with the private equity around $170 to $200 million). Either way, the comments are still extremely positive. From the report: >>>>We learned during our recent meetings with management that the company's pipeline of VC investments remains robust. The company finished 1999 with 16 private companies in the portfolio. So far in 2000 one of them has gone public and two additional investments have been made, yielding a current family of 17 private companies in the fold. We have attempted to derive public market values for these stakes and have concluded that based on three core assumptions relating to average cost, public market multiples and success rates implies a net asset value per ADS of about $100 per share, before giving effect to any additional investments.<<<< And concerning the multiple to projected book in their previous report? >>>>Simply imputing a 2x NAV valuation to the aforementioned $100 per share public market value estimate suggests a price objective of $200 per share, hence our new target price. Alternatively, one can look to our new year-end NAV projection of $60 and apply a modestly higher price-to-book multiple of 3.3x and arrive at a similar $200 target. What is the right multiple? It is hard to say, but we believe that the market is (more quickly than we ever expected) concluding that a multiple closer to the 10x-plus level than to the 2x level is appropriate in the context of the aforementioned comparables.<<<< Even a simple 5x on 60 gives us 300 (pre-split). If you use a decent multiple to the $100 NAV, then you can get 400 on up. It is not unreasonable to assume there remains a lot of room for upside before you would consider this company overvalued, or even fairly valued in comparison to like companies.