China Crescent Ent. Inc (fka CCTR)

[stervc]

CCTR**A Worst Case Scenario Valuation…

CTTR has recently released news indicating below…

http://ih.advfn.com/p.php?pid=nmona&article=46143823
** $50.9 million in revenue through the first nine months of 2010
** $3.3 Million Net Income through the first nine months of 2010

Considering that $3.3 million was the amount of Net Income from the first 9 months (3 qtrs) of 2010, that’s an average of $1.1 Million Net Income per quarter. That means that it’s safe to calculate an annual Earnings Per Share (EPS) for CCTR from a 12 month (4 qtrs) perspective to be…

$1,100,000 x 4 qtrs = $4,400,000 Net Income

According to the recently released SEC filings and info on pinksheets.com/otcmarkets.com for CCTR, their Outstanding Shares (OS) is 967,077,213 shares:
http://www.otcmarkets.com/stock/CCTR/company-info
http://knobias.10kwizard.com/files.php?alld=ON&sym=cctr&Submit=Go

According to the 8-K filed below Dec 8, 2010, the CCTR Authorized Shares (AS) was increased to 3,000,000,000 shares:
http://knobias.10kwizard.com/filing.php?param=&ipage=7282010&DSEQ=1&SEQ=&SQDESC=SECTION_BODY&exp=

It only logically makes sense that the company would not increase the AS to 3 billion simply to maximize the OS to 3 billion without leaving the company any shares within the Treasury of Shares within the AS. This leads me to think that they are issuing a billion restricted shares which will bring the OS to around the 2 billion shares area in my opinion. If the OS number turns out to be different after later verification then simply use the Substitution Property to insert the right number as the formulas for assessing this fundamental valuation will remain constant as indicated below:

Net Income ÷ Outstanding Shares = Earnings Per Share (EPS)

Net Income for 12 months = $4,400,000
OS = 2,000,000,000

$4,400,000 Net Income ÷ 2,000,000,000 OS shares = .0022 EPS

Now we must multiply this .0022 EPS by a Price to Earnings (P/E) Ratio to determine where CCTR should fundamentally trade. I will use two different P/E ratios to show a conservative side and to show where CCTR should fundamentally trade based on the P/E ratio for the Industry in which it currently trades. I will first use 12 as a conservative P/E Ratio and then I will use the verified ”actual” P/E Ratio of 58.00 to reflect the Diversified Communication Services Industry within the Technology Sector of which CCTR trades below:
http://biz.yahoo.com/p/846conameu.html



Now we must multiply this .0022 EPS by 12 as a conservative Price to Earnings (P/E) Ratio to determine where CCTR should fundamentally trade.

12 P/E Ratio x .0022 EPS = .026 per share

This means that CCTR:OTCBB ”could” fundamentally trade within the .026 per share price range.



Again, as you can see for further confirmation, the Diversified Communication Services Industry has a 58.00 P/E Ratio that can be confirmed from the link below to reflect what’s currently considered:
http://biz.yahoo.com/p/846conameu.html

So, again, you can see that using 12 as the multiple (P/E Ratio) was very conservative indeed for the growth rate used here with CCTR. To get a better understanding of how a P/E Ratio is used to further determine the assessment of a fundamental valuation to be multiplied by the EPS is further explained within the link below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170

Now let’s multiply the above annually calculated EPS for CCTR of .0022 EPS by 58.00 as the actual P/E Ratio that currently exists for the Diversified Communication Services Industry where CCTR currently trades to determine where CCTR should fundamentally trade based on its ”actual” P/E Ratio:

58.00 P/E Ratio x .0022 EPS = .127 per share



This means that CCTR should fundamentally trade within .026 to .127 per share. However, since CCTR is ”actually” generating these Revenues and Net Income, there is just one thing that can really stop the above valuations from happening… dilution. The management of CCTR has to have enough sense to let it breath. They need to make sure they stop the dilution and the market will probably give it a fair chance to reach those fundamental price ranges.

CCTR is not a pink sheets stock. CCTR is a fully reporting OTCBB stock that files regularly with the SEC. If they can minimize dilution, they could see the company’s equity grow in leaps and bounds to where they would even be able to sell fewer shares at much higher prices. This could be a win win situation for everyone. This is almost a no-brainer for the company to be wise enough to see this.

v/r
Sterling