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Microcap & Penny Stocks : Xin Net Technologies - BB: XNET - The Next Internet Stock? -- Ignore unavailable to you. Want to Upgrade?

To: Ted M who wrote (611)	3/31/1999 2:10:00 AM
From: Francois Goelo	Read Replies (2) \| Respond to of 1593

TED M, EXPLANATION OF XNET EARNINGS FROM ITS INVESTOR'S PACKAGE. It has been said that my discussion on XNET earnings in previous posts involved non public information. Nothing is further from the truth: I called Mr Cheung at 604-689 4407, who sent me an investor's package which contained a brochure and graph of users of XNET services. I assumed these documents were publicly available and used them as follows: 1) From the graph: in January 1999, there were approximately 11,000 e-mail users and 7000 dial-up users, which respectively brought in average yearly revenue (from brochure) of $24.00 and $150. The calculation is thus: 11,000 x 24 = 264,0000 7000 x 150 = 1,050,000 Total forward anticipated yearly revenue (1999), based on the month of January 99 is: 264,000 + 1,050,000 = $1,314,000 2) The brochure mentioned 50% operating margins, but further research in the documents supplied, actually shows that operating income, net of expenses is, in round figures: 33% Net revenue then would be: 1,314,000 x 33% = $433,620.00 Since revenue from other sources, such as ISP, internet operation , e-commerce is not quantified, I rounded that to $450,000.00, or $37,500 per month, which seems a reasonable net earning assumption, based on one month only of January 1999, going forward into the 1999 year. Obviously, this is an estimate only and the actual figures could be substantially lower or higher. 3)Why did the XNET share go up so substantially? Because, it used to be at 40/45 cents, and 14.2 Millions shares would give it a capitalization of less than $6 Millions, which seems kind of ludicrous for a profitable Company with great potential in an expanding market. 4) I assumed that the outstanding shares of 14.2 Millions are public knowledge. The float appears to be somewhere between 2 and 5 Millions. Disclaimer: this figures may be totally wrong and I have sent a copy to Mr Cheung to correct any mistake. I am not an accountant and cannot be held responsible for any discrepancy, as I am doing this as a service to the investing community for which I have not been rewarded. It is my opinion only, so do not use any of this information for investment purposes and do your own Due Diligence. I am long 30,000 shares in XNET. Regards, F. Goelo + + +

To: Ted M who wrote (611)	3/31/1999 7:20:00 AM
From: FFNEODOC	Respond to of 1593

Market Cap & Revenues Update: AOL vs IMOT vs XNET Just when we think the relative valuation of XNET can't get more favorable, It does. Updated Market Cap & Revenues comparison; XNET vs IMOT vs AOL using share prices from 3/30: IMOT is a smaller China ISP than XNET with reported revenues of only $140,000 for there 1st 2 quarters of operation & ~$4,000 in profits. AOL has a Market Cap (MC) of $149 billion, XNET $19 million, IMOT $67 million. REVENUES Estimate; XNET 1.7 mil, IMOT .28 Mil, AOL 4 bil MC/R: XNET 11, IMOT 239, AOL 37 P/E: XNET 42, IMOT 8375, AOL 657 Keep an eye on xinnet.net for XNET financial info due out very soon. Site apparently was briefly up yesterday. Note that our revenues estimates are based on the investor's package from XNET, but have been reviewed by the company with no major changes suggested. See: Message 8340359 At any rate when the revenues are posted on the new web site (We anticipate sometime within a week), we'll have a more accurate idea. Keep checking @ xinnet.net The ratios for the Chinese ISP's might be justified in being larger than for AOL, since in the next 5 years there will be a 16 times increase in Internet users in China, and only a 3 times increase in the US. (See chinavista.com ) At any rate, by comparison XNET clearly appears to be undervalued at this current price level. MC/R ratio may be a more important indicator than P/E, since Top Line growth (Revenue) is probably more important in China at this stage (Like it was to AOL 3-4 yrs ago... remember in 1997 AOL lost $5.22/share). In other words, you would want to sacrifice some earnings to obtain a larger market share in the current Chinese competitive environment.