Value Microcaps Motherboard

[2morrowsGains]

HE.to...A growth story unfolding. Earnings should show a huge ramp up starting in Q3 and Q2 EPS was C$0.06. A great buying opportunity in a strong sector IMO, with HE.to / HNWEF trading in the low to mid $2's. Just take a look at Hanwei's July 2008 investor presentation. Go to this link and click the PDF file labeled Hanwei Overview...
http://www.hanweienergy.com/home.html

Here are a few clips from the Overview...

Re: The Wind / Deta Acquisition

- $86.2 million (RMB 600 million) acquisition – 50% cash / 50%
common shares – Common shares and portion of cash paid as
earn out over 4 years subject to performance
o $23.4 million in initial cash payments
o $19.1 million in total cash earn out payments
o $43.7 million in HE shares (~8 million @ $5.30)

- "5 year contract for 1,200MW of wind power equipment valued at $1.2 billion (RMB 8.4 billion) with a negotiated price for turbines and blades that targets a 15% net after tax profit (replaces year 2 and 3 of original contract)."

(Side note: $1.2B @ 15% net after tax profit???
$1.2B x 15% = $180M divided by 5 years = $36M a year divided by 64M fully diluted shares outstanding = approx $0.56 EPS a year on average!! Even if they dilute the share count by 30%, EPS would still average approx $0.43 a year! And that's just the Deta acquisition!).

- Deta acquisition expands production capacity for wind blades enabling Hanwei to sell products domestically and internationally.




The information posted by 2morrowsGains is opinion only and should not to be taken as investment advice.