> Why CHINA is worth $15.and potentially  a lot higher  and why mkt is
> playing catchup on massive misvaluation.

> CHINA. is divided in 4 major business segments – namely CDC software,
> CDC global service, CDC games and its web portal China.com with mobile
> services.
> CDC software and CDC Global services accounts for more than 80 % of
> its sales in the fast growing global  CRM sector.

> The latest news of spinning a piece of CDC Software in a IPO  gives
> CDC Software a valuation of about 57.6 million dollars on 4.8million
> shares offered at $12 a piece. That represents just 16.6% of the
> company offered.   83.4% of the rest will still be owned by CHINA
> parent with a valuation of 289.3 million dollars.

> This ipo pricing at $12  equates to about 1.4 times PS valuation for
> CDC Software. Based on CRM industry valuation of 4 X PS (look at stock
> symbol CRM) and the hot outlook for both China’s and India’s very
> strong CRM  near term growth path , CDC software with 240.8 million in
> revenues should trade at least 4 X PS to $33 per share after the IPO
> to give its fair proper valuation. If that comes to reality, CHINA’s
> 83.4% ownership of CDC software will alone give CHINA a valuation of
> 803 million.
> CDC Games announced this morning that it sees a increase of 50% in
> revenues due to launch of new games. With current revenue of 44.9mil
> and projected revenues of 67.4 million,  an industry valuation of 5 X
> PS will add another 337million to CHINA parent valuation. This
> valuation is fair  as the Chinese gaming mkt is red hot.The current
> mkt cap for China for all 4 different business divisions is just 236
> million.

> CDC Global services at 109.7 miilion revenues at 4X industry PS will
> give the parent a valuation of 438.8 million while China.com portal
> and mobile services’ 13.7 million revenues will give it  another 4X PS
> of  54.8 million.

> Adding up all 4 businesses of CHINA at 83.4 % ownership of CDC
> software given the above analysis of 4X PS for all its businesses
> except a 5X PS  for CDC Games will give it a  1.63 billion valuation.
> And at 106 million shares outstanding, that gives CHINA a valuation of
> $15.41 a share. And all that is assuming NO GROWTH in revenues in all
> CDC businesses(which is not realistic) except a 50% increase in CDC
> Games.Even a very conservative valuation  estimate of 1X PS for all
> CDC businesses except a 5X PS in CDC Games will still give CHINA a
> valuation of $6.23 a share.

> So why the massive mispricing? One, the market is quickly adjusting to
> the just announced ipo information.Secondly, the stock has long been
> undervalued due to recent selloffs in global markets last year.
> Thirdly, they have recently removed their long term debt obligation
> concerns. The company reduced its long term debt, having acquired back
> an aggregate of $124.8 million, of its $168 million of Notes, from 10
> of 11 separate Note holders. This leaves China with about 40 mil in
> long term debt and still over 160 mil in cash. The most recent earning
> report, though reported a weaker quarter, also suggested that the
> company is doing fine in the current industry condition.
> Although the $15 price valuation seems a far fetch from the current
> $3, it is not too surprising if one consider that the recent high back
> in 2007 was as high as $11.55 a share. The stock only came down
> drastically in 2008 due to global equity market crisis  and CHINA’s
> already addressed long term debt outlook.
> The fair mkt valuation of $15 seems a far fetch from the current stock
> price of $3 though it provides a tremendous opportunity. One risk
> factor is that any stock in the equity mkt could stay undervalued for
> long periods of time. One should not expect the $15 dollar valuation
> to be reached in any fast fashion. This should be looked at as a very
> long term investment of 1-5 yrs.
> Trading Guidelines -Pls do your own homework on the above pick and pls
> apply strict stop loss and trailing stops. Assess risk/reward,,
> fundamentals:  potential changing emerging news events.

> I agree that the company has long term potential.  On the other hand,
> not many people have the patience to wait.  It is always nice to be
> able to jump into a stock and catch the ride upward.  Competition is
> keen in that field and the company may have to do more.  As you
> mentioned, $15 seems to be far fetch at the current level but
> something around $5 - $6 is realistic to me, taking account oversold
> of the market.

> On Aug 3, 8:32 am, L A <idub...@gmail.com> wrote:

> > Why CHINA is worth $15.and potentially  a lot higher  and why mkt is
> > playing catchup on massive misvaluation.

> > CHINA. is divided in 4 major business segments – namely CDC software,
> > CDC global service, CDC games and its web portal China.com with mobile
> > services.
> > CDC software and CDC Global services accounts for more than 80 % of
> > its sales in the fast growing global  CRM sector.

> > The latest news of spinning a piece of CDC Software in a IPO  gives
> > CDC Software a valuation of about 57.6 million dollars on 4.8million
> > shares offered at $12 a piece. That represents just 16.6% of the
> > company offered.   83.4% of the rest will still be owned by CHINA
> > parent with a valuation of 289.3 million dollars.

> > This ipo pricing at $12  equates to about 1.4 times PS valuation for
> > CDC Software. Based on CRM industry valuation of 4 X PS (look at stock
> > symbol CRM) and the hot outlook for both China’s and India’s very
> > strong CRM  near term growth path , CDC software with 240.8 million in
> > revenues should trade at least 4 X PS to $33 per share after the IPO
> > to give its fair proper valuation. If that comes to reality, CHINA’s
> > 83.4% ownership of CDC software will alone give CHINA a valuation of
> > 803 million.
> > CDC Games announced this morning that it sees a increase of 50% in
> > revenues due to launch of new games. With current revenue of 44.9mil
> > and projected revenues of 67.4 million,  an industry valuation of 5 X
> > PS will add another 337million to CHINA parent valuation. This
> > valuation is fair  as the Chinese gaming mkt is red hot.The current
> > mkt cap for China for all 4 different business divisions is just 236
> > million.

> > CDC Global services at 109.7 miilion revenues at 4X industry PS will
> > give the parent a valuation of 438.8 million while China.com portal
> > and mobile services’ 13.7 million revenues will give it  another 4X PS
> > of  54.8 million.

> > Adding up all 4 businesses of CHINA at 83.4 % ownership of CDC
> > software given the above analysis of 4X PS for all its businesses
> > except a 5X PS  for CDC Games will give it a  1.63 billion valuation.
> > And at 106 million shares outstanding, that gives CHINA a valuation of
> > $15.41 a share. And all that is assuming NO GROWTH in revenues in all
> > CDC businesses(which is not realistic) except a 50% increase in CDC
> > Games.Even a very conservative valuation  estimate of 1X PS for all
> > CDC businesses except a 5X PS in CDC Games will still give CHINA a
> > valuation of $6.23 a share.

> > So why the massive mispricing? One, the market is quickly adjusting to
> > the just announced ipo information.Secondly, the stock has long been
> > undervalued due to recent selloffs in global markets last year.
> > Thirdly, they have recently removed their long term debt obligation
> > concerns. The company reduced its long term debt, having acquired back
> > an aggregate of $124.8 million, of its $168 million of Notes, from 10
> > of 11 separate Note holders. This leaves China with about 40 mil in
> > long term debt and still over 160 mil in cash. The most recent earning
> > report, though reported a weaker quarter, also suggested that the
> > company is doing fine in the current industry condition.
> > Although the $15 price valuation seems a far fetch from the current
> > $3, it is not too surprising if one consider that the recent high back
> > in 2007 was as high as $11.55 a share. The stock only came down
> > drastically in 2008 due to global equity market crisis  and CHINA’s
> > already addressed long term debt outlook.
> > The fair mkt valuation of $15 seems a far fetch from the current stock
> > price of $3 though it provides a tremendous opportunity. One risk
> > factor is that any stock in the equity mkt could stay undervalued for
> > long periods of time. One should not expect the $15 dollar valuation
> > to be reached in any fast fashion. This should be looked at as a very
> > long term investment of 1-5 yrs.
> > Trading Guidelines -Pls do your own homework on the above pick and pls
> > apply strict stop loss and trailing stops. Assess risk/reward,,
> > fundamentals:  potential changing emerging news events.