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I can't see, but it's here:
http://finance.yahoo.com/q?s=AWYIE.OB
News OUT!!!!
NEWS OUT!!!!
http://biz.yahoo.com/pz/080820/148903.html
Ariel Way Comments on 10-QSB Filing
Wednesday August 20, 8:36 am ET
VIENNA, Va., Aug. 20, 2008 (GLOBE NEWSWIRE) -- Ariel Way, Inc. (OTC BB:AWYI.OB - News) today made the following statement:
``On August 19, 2008, we had prepared for filing our quarterly report 10-QSB for the nine-month period ended June 30, 2008. However, in our final review with our auditors of the report, we decided not to file but to continue to enhance, among others, the reporting related to the statements of cash flows. These statements of cash flows build on the filing from the previous report, and we want to make sure that they properly tie together. On an unaudited proforma basis, the report shows, as expected, good revenues with strong positive net operating income. We believe we are still on target for the financial performance of the Company for the year.
ADVERTISEMENT
We regret the delay with the filing, but our outside accountants will continue to work diligently with management to complete the enhancements and file at earliest.``
About Ariel Way, Inc.
Ariel Way, Inc., a Florida corporation (``Ariel Way'' or the ``Company''), is a technology and services company for highly secure global communications, multimedia and digital signage solutions and technologies. The Company is focused on developing innovative and secure technologies, acquiring and growing profitable advanced technology companies and global communications service providers and creating strategic alliances with companies in complementary product lines and service industries.
More information about Ariel Way can be found on the web at http://www.arielway.com.
Forward-Looking Statements: Certain of the statements contained herein may be, within the meaning of the federal securities laws, ``forward-looking statements,'' which are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. See the Company's Form 10-KSB for the fiscal year ended September 30, 2007 for a discussion of such risks, uncertainties and other factors. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. These forward-looking statements are based on management's expectations as of the date hereof, and the Company does not undertake any responsibility to update any of these statements in the future.
Contact:
Ariel Way, Inc.
Investor Relations
Arne Dunhem
(703) 624-8042
info@arielway.com
15,000,000*$5,00 pps=$75,000,000
The pps must be $5,00.
So news are aroud the corner
Very soon...
NEWS OUT!!! 10-K
Form 10-K for QUANTUM FUEL SYSTEMS TECHNOLOGIES WORLDWIDE INC
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3-Jul-2008
Annual Report
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations together with the consolidated financial statements and related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described under "Risk Factors" and elsewhere in this annual report.
Overview
We are a fully integrated alternative energy company and a leader in the development and production of advanced propulsion systems, energy storage technologies, and alternative fuel vehicles. We believe that we are uniquely positioned to integrate advanced fuel system, electric drive and battery control system technologies for fuel cell and hybrid vehicles based on our years of experience in vehicle-level design, vehicle electronics and system integration.
Our portfolio of technologies includes electronic controls, hybrid electric drive systems, hydrogen storage and metering systems, and alternative fuel technologies that enable fuel efficient, low emission hybrid, plug-in electric hybrid, fuel cell and alternative fuel vehicles. We provide powertrain engineering, system integration, manufacturing and assembly of packaged fuel systems and battery control systems for vehicles and other applications including fuel cells, hybrids, plug-in electric hybrid, alternative fuels, and hydrogen refueling. We also design, engineer and manufacture hybrid and fuel cell vehicles.
Our powertrain engineering, system integration, and assembly capabilities provide fast-to-market solutions to support the production of hybrid and plug-in hybrid, hydrogen-powered hybrid, fuel cell, and alternative fuel vehicles, as well as modular, transportable hydrogen refueling stations. Our customer base includes automotive Original Equipment Manufacturers (OEMs), military and governmental agencies, aerospace, and other strategic alliance partners.
We classify our business operations into two reporting segments: Quantum Fuel Systems and Corporate. The Corporate segment consists of general and administrative expenses incurred at the corporate level that are not directly attributable to the Quantum Fuel Systems segment. In prior years we had a third business segment-Tecstar Automotive Group business segment. As discussed more fully below under Recent Developments, the Tecstar Automotive Group business segment ceased operations on January 16, 2008, when we transferred substantially all of that segment's business operations to an affiliate of our lender. As a result of such transfer, the historical activities of the Tecstar Automotive Group business segment are now classified as discontinued operations. In addition, certain historical indirect expenses of the Corporate segment have been reclassified and are reported as discontinued operations.
The Quantum Fuel Systems business operations primarily consist of design, manufacture and supply of packaged fuel and electric drive and battery system technologies for use in fuel cell, hybrid, plug-in electric hybrid, hydrogen and other alternative fuel vehicles. This segment generates product revenues through the sale of hydrogen fuel storage, fuel delivery, and electronic control systems to OEMs, the installation of its systems into OEM vehicles, and the sale of transportable hydrogen refueling stations. Product revenues are also generated through the sale of compressed natural gas (CNG), propane (LPG), and hydrogen fuel storage, fuel delivery, and electronic control systems for internal combustion engine applications. In addition to product sales, the Quantum Fuel Systems segment generates contract revenue by providing engineering design and support to the OEMs so that its advanced propulsion systems integrate and operate with their fuel cell or hybrid applications. Contract revenue is also generated from customers in the aerospace industry, military and other government entities, and other strategic alliance partners.
Prior to its disposal, the Tecstar Automotive Group segment was comprised of virtually all of the business activities acquired via the merger with Tecstar Automotive Group in March 2005, and subsequent specialty
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vehicle business acquisitions. The Tecstar Automotive Group primarily consisted of second stage manufacturing of specialty equipment for General Motors' pick-up trucks and SUVs, engineering and design capabilities for concept vehicles, and distribution of conversion vehicles and automotive accessories through OEM dealer networks.
The chief operating decision maker allocates resources and tracks performance by the reporting segments, and evaluates performance based on profit or loss from operations before interest and income taxes.
Recent Developments
Disposal of Tecstar Business Segment
On January 11, 2008, Tecstar Automotive Group was in default of the January 1, 2008 semi-annual interest payment due to affiliates of our secured lender under terms of certain convertible note obligations (Tecstar Convertible Notes). As a result of the default, all the amounts due under the Tecstar Convertible Notes were immediately due and payable. On January 16, 2008, we completed a series of transactions with our secured lender that restructured our outstanding debt obligations and resulted in our transfer of substantially all of the assets of our Tecstar Automotive Group business segment to an affiliate of our secured lender, WB Automotive, Inc. (WB Automotive), as payment in full of the obligations due under the Tecstar Convertible Notes.
The transfer of the Tecstar business segment was structured as a strict foreclosure under Article 9 of the Uniform Commercial Code pursuant to which Tecstar Automotive Group and WB Automotive executed a Strict Foreclosure Agreement, pursuant to which, under Article 9 of the Uniform Commercial Code, Tecstar Automotive Group assigned to WB Automotive all of its right, title and interest in and to the equity interests in Tecstar's operating subsidiaries (the "Operating Subsidiaries"), Tecstar's interest in the Amstar joint venture, receivables owed to Tecstar by the Operating Subsidiaries and Tecstar's interest in a $1.0 million cash collateral account, in full payment and satisfaction of the amounts owed by Tecstar under the Tecstar Convertible Notes. WB Automotive also released Quantum from its guaranty of the Tecstar Convertible Notes and a $5.0 million term note provided to Tecstar Automotive Group by the Company's secured lender on November 6, 2007 (Tecstar Term Note). In exchange for the foregoing release, Quantum (i) caused Tecstar Automotive Group to enter into and complete the transactions described above, (ii) paid $1.0 million to WB Automotive and (iii) agreed to assume $0.7 million in unpaid interest owed under the Tecstar Convertible Notes. Our lender subsequently cancelled the Tecstar Term Note in a separate agreement.
As a result of the transactions described above that resulted in the disposal of the Tecstar businesses, the historical activities and balances of the Tecstar Automotive Group Business segment are reported as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows for all periods presented in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets."
The disposal of the Tecstar businesses resulted in a gain of $8.6 million included in discontinued operations, net of taxes, for the year ended April 30, 2008 that resulted in part from concessions granted by our lender in restructuring the debt obligations. Prior to the restructuring, we had recorded significant losses for the Tecstar Automotive Group business segment attributable to the write-down of its long-lived assets and negative operating results reported in previous quarters.
Investment in Fisker Automotive
On August 7, 2007, our strategic partner, Fisker Coachbuild, LLC, and Quantum launched a new venture, Fisker Automotive, Inc. (Fisker Automotive), to produce premium plug-in hybrid automobiles. Initial deliveries of a four-door luxury sports sedan are anticipated to commence in the fourth quarter of calendar 2009. Upon formation, we owned 62% of Fisker Automotive. Through April 30, 2008, Fisker Automotive has raised a level of capital that has resulted in the dilution of our ownership interest down to 30.7%. We have two of Fisker
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Automotive's six seats on the Board of Directors. Fisker Automotive will need to raise additional capital in order to complete future phases of development, testing, and tooling for the new vehicle platform, which will further reduce our ownership percentage in Fisker Automotive.
We account for our equity interest in Fisker Automotive under the equity method of accounting in accordance with APB Opinion No. 18, "The Equity Method of Accounting for Investments in Common Stock," (APB 18). Due to the temporary nature of our majority interest in Fisker Automotive, we also accounted for our initial equity interest in Fisker Automotive under the equity method. Although Fisker Automotive is a variable interest entity as defined by Financial Accounting Standards Board (FASB) Interpretation No. 46 (revised December 2003), "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51" (FIN 46R), we are not the primary beneficiary as defined by FIN 46R.
Fisker Automotive has incurred accumulated deficits from inception through April 30, 2008 for design and development activities for the new vehicle platform. We have not contributed any cash or other assets with a historical cost basis to the venture and we have no obligation to fund deficit balances. As a result, our initial investment balance and balance as of April 30, 2008 is zero and there is no activity to be reported in our consolidated statement of operations for the year ended April 30, 2008.
We received $6.5 million in cash from Fisker Automotive during fiscal 2008 and recognized $2.2 million in contract revenue during this period. The cash received in excess of the revenue earned of $4.3 million is included as part of deferred revenue on the accompanying consolidated balance sheet as of April 30, 2008.
Investment in Asola
On January 4, 2008, we acquired a 24.9% ownership interest in asola Advanced and Automotive Solar Systems GmbH (Asola), a solar module manufacturer located in Erfurt, Germany. In exchange for the ownership interest, we (i) provided 0.3 million euro (US$0.4 million), (ii) committed to contribute an additional 1.2 million euro (US$1.9 million was contributed on May 8, 2008) to provide for capital equipment for the planned expansion of Asola's annual manufacturing capacity to approximately 40 to 45 mega watts peak (MWp), (iii) committed to provide a guaranty to Asola's bank of 1.0 million euro related to an anticipated expansion of Asola's bank financing arrangement, and (iv) committed to transfer 15.0% ownership interest in our solar venture in the United States, if and when such venture is established. The conversion rate of one euro to one U.S. dollar was 1.56 to 1 as of April 30, 2008. We account for our equity interest in Asola under the equity method of accounting in accordance with APB 18. Although Asola is a variable interest entity, we are not considered the primary beneficiary as defined by FIN 46R.
Asola has reported total assets of 11.3 million euro; total liabilities of 9.5 million euros, including debt obligations of 1.4 million euros, as of December 31, 2007 (unaudited); revenues of 24.9 million euro and net profits of 0.7 million euro for calendar year 2007 (unaudited); and revenues of 13.3 million euro and net profits of 0.9 million euro for the period January 1, 2008 to April 30, 2008 (unaudited). Our equity in earnings of Asola was US$0.3 million from the date of the equity investment through April 30, 2008.
On November 7, 2007 we entered into an agreement with Asola under which we agreed to purchase one-half of Asola's rights and obligations under a certain long-term solar cell supply agreement to which Asola is a party. Asola's obligations under the long-term solar cell supply agreement, dated November 1, 2007, includes the required purchase by Asola of solar cells with a cumulative power of 155 mega watts peak (MWp) for the period from January 1, 2008 through December 31, 2017 at predetermined fixed prices, with prepayments required by November 1, 2007 of 1.0 million euro, by September 1, 2008 of 3.0 million euro, and by September 1, 2009 of 5.0 million euro.
Our agreement to purchase one-half of Asola's rights and obligations under Asola's long-term solar cell supply agreement provides us with the rights to purchase 77.5 MWp. In consideration for Asola's sale of one-half
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of its contract rights to us, we paid Asola 1.0 million euro (US$1.4 million) on October 29, 2007 and agreed that we are responsible for up to 1.5 million euro of the prepayment due in 2008 and responsible for up to 2.5 million euro of the prepayment due in 2009. Our payment to Asola in October 2007 in connection with the solar cell arrangement is included in deposits and other assets on the accompanying consolidated balance sheet as of April 30, 2008. We anticipate that Asola will generate cash flows sufficient to cover a portion of the prepayments; however, if there is insufficient cash available within Asola operations, we will endeavor to raise funds specifically for Asola to cover the shortfall. We had not purchased any solar cells from Asola under the arrangement through April 30, 2008.
We believe these agreements secure a ten-year supply of silicon photovoltaic solar cells that we and Asola anticipate to utilize for the manufacture of solar modules for commercial, residential, and automotive applications in both Europe and the United States.
Quantum Fuel Systems Segment
Our Quantum Fuel Systems segment supplies our advanced gaseous fuel systems for alternative fuel vehicles to OEM customers for use by consumers and for commercial and government fleets. Since 1997, we have sold approximately 20,000 fuel systems for alternative fuel vehicles, primarily to General Motors, which in turn have sold substantially all of these vehicles to its customers. We also provide our propulsion systems and hydrogen storage products for hybrid and fuel cell applications to major OEMs through funded research and development contracts and on a prototype and production intent basis. These systems and hydrogen products are not currently manufactured in high volumes and will require additional product development; however, we believe that a commercial market will begin to develop for our hybrid propulsion system, Q-Drive, within the next two years. We expect a commercial market to develop for our hydrogen and fuel cell vehicle products further in the future. We believe that these systems will reach production volumes only if OEMs produce fuel cell applications and hydrogen products using our systems on a commercial basis.
A number of domestic and international automotive and industrial manufacturers are developing alternative clean power systems using fuel cells, hybrid systems or clean burning gaseous fuels in order to decrease fuel costs, lessen dependence on crude oil and reduce harmful emissions. Our products for these markets consist primarily of fuel storage, fuel delivery, electronic vehicle control systems and battery control systems, as well as system integration of our products into fuel cell, hybrid, and alternative fuel vehicles, and hydrogen refueling products, which includes the complete design of fuel cell and hybrid vehicles to demonstrate our advanced fuel systems expertise.
In May 2007, we were awarded a $4.9 million contract to develop a diesel hybrid electric version of our Alternative Mobility Vehicle (AMV) "Aggressor." This program is a follow on to our successful "Aggressor" vehicle, a high performance light-duty off-road fuel cell hybrid vehicle developed for TARDEC. The objective of this program is to develop a second generation high performance light-duty off-road hybrid electric vehicle platform based on the results of and feedback from the U.S. Army's testing and evaluation of the Aggressor. The propulsion system for this next phase of AMV development will focus on a JP-8 fuel-compatible diesel internal combustion engine based, battery dominant, series hybrid electric system, which would provide a cost-effective, near-term solution as fuel cell technology matures. The target mission profile is long range reconnaissance. Pre-production prototypes will be developed and built for testing and evaluation by selected commands to assess mission suitability, supportability, performance objectives, and guidance on final vehicle configuration.
In July 2007, we were awarded a contract to supply ten hydrogen hybrid Priuses to VistOrka for use in Iceland's SMART-H2 project. The SMART-H2 will be one of the largest hydrogen demonstrations in the world.
In September 2007, we received a letter from General Motors nominating us as their hydrogen storage vessel supplier for their next generation of hydrogen storage systems under their fuel cell vehicle program. On November 21, 2007 we received initial purchase orders totaling $4.2 million for the program.
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In October 2007, we received an order for six hydrogen hybrid vehicles for the U.S. Army's Tank Automotive Research, Development and Engineering Center.
In November 2007, we began providing services to our affiliate, Fisker Automotive, on an initial concept analysis program associated with powertrain and software control systems for a production intent hybrid-electric vehicle under a $1.0 million arrangement. In January 2008, Fisker Automotive previewed their new plug-in hybrid four-door sport sedan, known as the "Fisker Karma," at the North American International Auto Show. The Fisker Karma is being engineered to achieve 50 miles of zero emission, battery-only range while providing combined gasoline-electric hybrid operation to enable uncompromised vehicle range and performance. The services under the first contract were completed in January 2008. On February 14, 2008, we were awarded a second contract for $13.5 million for the second phase of the development. Under the second phase, we will develop the powertrain and software control systems and integrate our PHEV architecture that we call "Q-Drive" for the Fisker Karma production model that is expected to have initial deliveries beginning in the fourth quarter of calendar 2009.
In March 2008, we announced we were selected by the U.S. Department of Energy for final negotiations for a contract to develop next-generation manufacturing technologies for hydrogen storage vessels. The total value of this project, which will be done in partnership with The Boeing Company, is $5.6 million over a three year period.
Our Quantum Fuel Systems segment revenues and cash flows in the future will be dependent on the success of the Fisker Karma, further advancement of OEM fuel cell technologies and our OEM customers' internal plans, spending levels and timing for pre-production development programs and commercial production. This segment depends on the industry-wide growth of the hybrid hydrogen, plug-in electric hybrid, fuel cell, and other alternative fuel markets, which in turn is dependent on regulations, laws, hydrogen availability and refueling, technology advancements, and consumer adoption of alternative fuel and hydrogen technologies on a commercial scale.
Our fuel storage systems must be able to withstand rigorous testing as individual components and as part of the fuel system of the vehicles. The fuel system as a whole, including the tank, regulator and fuel lines, need to comply with OEM vehicle requirements and applicable safety standards. Our systems are generally designed, validated and certified for short-term life, approximately three years, and are produced in accordance with requirements specified by our OEM customers. We currently have programs with OEMs to design, validate and certify systems for longer durability and for vehicles designed for commercialization.
Our Quantum Fuel Systems business is generally related to hybrid, fuel cell and alternative fuel vehicle development programs and product sales, which vary directly with the program timing and production schedules of our OEM and other customers. The market for these vehicles is sensitive to general economic conditions, government agency and commercial fleet spending and consumer preferences. The rate at which our customers sell hybrid, fuel cell or alternative fuel vehicles depends on their marketing and distribution strategy, as well as company specific inventory and incentive programs. Any significant reduction or increase in production of these vehicles by our OEM customers may have a material effect on our business. Our CNG program with General Motors was completed in November 2006. We anticipate that future programs for CNG applications will be in international markets, specifically Europe, China and India. In April, 2007, we signed a memorandum of understanding to establish a cooperative joint venture with a major automaker in China for the development and commercialization of hybrid and alternative fuel vehicles, manufacture of gaseous fuel components, and integration of advanced propulsion systems. We also signed a memorandum of understanding in May 2007 for the marketing, sales, and distribution in India of its leading alternative fuel vehicle products and systems for compressed natural gas (CNG), blends of natural gas and hydrogen, and liquid petroleum gas (LPG). We are currently in discussions with other parties to modify existing components and systems to meet specific vehicle applications for those markets.
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Our industry is also dependent upon a limited number of third party suppliers of materials and components for our products. Any quality problems or supply shortages with respect to these components could negatively impact our business.
Tecstar Automotive Group Segment
On January 16, 2008 we transferred substantially all the assets of the Tecstar Automotive Group, Inc. to an affiliate of our secured lender pursuant to a strict foreclosure under Article 9 of the Uniform Commercial Code. As a result of the transfer, the Tecstar Automotive Group business segment (formerly consisting of all of the Tecstar businesses and operating units) ceased operations for purposes of our financial reporting. The Tecstar Automotive Group segment, prior to its disposal, engineered and integrated specialty equipment products into motor vehicle applications, primarily General Motors' pick-up trucks and sport utility vehicles, provided vehicle build capabilities associated with military vehicle projects and provided design and powertrain services for high performance cars.
As a result of the disposal of the Tecstar businesses, all historical activities of the Tecstar Automotive Group business segment have been classified as discontinued operations in the accompanying consolidated statements of operations and consolidated statements of cash flows.
Financial Operations Overview
In managing our business, our management uses several financial and non-financial factors to analyze our performance. Financial factors include forecast to actual comparisons, analysis of revenue and cost trends, backlog of customer programs, and changes in levels of working capital. Non-financial factors include assessing the extent to which current programs are progressing in terms of timing and deliverables and the success to which our systems are interfacing with our customers' vehicle applications. We also assess the degree to which we secure additional programs or new programs from our current or new OEM customers and the level of government funding we receive for propulsion systems and storage solutions. We also evaluate the number of units shipped as part of current and new programs and evaluate the operations of our affiliates, Fisker Automotive, Asola and ALP.
For the fiscal years ended April 2006, 2007 and 2008, revenue related to sales of our products to and contracts with General Motors and its affiliates represented 71%, 70% and 64%, respectively, of our total consolidated revenue from continuing operations for these periods.
We recognize revenue for product sales upon shipment or when goods and systems are assembled on the vehicles and prepared and deliverable to our customers in accordance with our contract terms and collectibility is reasonably assured. Contract revenue is principally recognized based on the percentage of completion method. Revenues on certain other contracts are recognized on a time and materials basis as costs are incurred.
We expense all research and development when incurred. Research and development expense includes both customer-funded research and development and company-sponsored research and development. Customer-funded research and development consists primarily of expenses associated with contract revenue. These expenses include application development costs we funded under customer contracts. We will continue to require significant research and development expenditures over the next several years in order to commercialize our products for hybrid, hydrogen fuel cell and alternative fuel applications.
General Motors Relationship
In 2002, we entered into a ten-year strategic alliance with General Motors. We believe that our strategic alliance with General Motors will advance and commercialize, on a global basis, the integration of our gaseous storage and handling systems into fuel cell systems used in the transportation markets. Under the alliance, Quantum and General Motors have co-developed technologies that are designed to accelerate the
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commercialization of fuel cell applications. Additionally, General Motors will endorse Quantum as a recommended provider of hydrogen storage, hydrogen handling and associated electronic controls. This strategic alliance expands the relationship that has been in place between General Motors and Quantum since 1993, through which we provided packaged natural gas and propane fuel systems for General Motors' alternative fuel vehicle products.
Pursuant to the terms of our Amended and Restated Certificate of Incorporation, upon the completion of our January 2003 public offering, all of the outstanding 3,513,439 shares of Series A common stock held by General Motors converted on a one-for-one basis into Quantum common stock. We also issued an additional 999,969 shares of our non-voting Series B common stock to General Motors pursuant to General Motors' anti-dilution rights. As a result of the conversion of the Series A common stock, General Motors no longer has anti-dilution rights. We recorded the value of the shares issued to General Motors as an intangible asset at fair market value on the date of their respective issuance. We are amortizing this intangible asset over the ten-year term of the strategic alliance with General Motors, subject to periodic evaluation for impairment.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles and are included elsewhere in this report. The preparation of these consolidated . . .
Why QTWW => $7 - $8 in the short
From yahoo
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_Q/threadview?m=tm&bn=25113&tid=72751&mid=72806&tof=29&rt=2&frt=2&off=1
155MW * $4.10/watt = $635 mil in sales
The $4.10/watt selling price comes from ER's for solar module companies which have recently reported (ie YGE, CSIQ, SOLF, TSL, STP). The price per watt has been rising for the last two quarters. It was about $3.60/watt six months ago, and about $3.85/watt last quarter. (The selling prices for these Chinese solar module manufacturers include foreign currency translation adjustments of about .20/watt since these companies bill customers in Euro's, then translate the revenue etc back to US dollars which is the currency they report in.)
The exciting thing about the projected Asola sales of $600 mil in revenue, is QTWW should receive 33% of the net profit as equity earnings to their P & L. At a 15% net income margin (versus 15% net margins for YGE, CSIQ, SOLF, TSL, STP), Asola would have net profits of $90 mil. QTWW would receive 1/3 of $90 mil, or $30 mil as additional equity earnings to their P&L. At 78.55 mil shs o/s, that's .38 eps. At a conservative 20 PE ratio, that's $7.60. And that does not even include the Asola USA division, nor the Fisker Auto division.
So, in summary, the solar division imo is worth $7.60. I think our current rally is because of the solar biz, Wall Street loves solar.
QTWW => $7 - $8 in the short term imo
Quantum partner to boost solar cell capacity
http://money.cnn.com/news/newsfeeds/articles/apwire/e483744d27203aa6e08b3c7fbc6eb085.htm
Quantum Fuel Systems partner to raise solar-cell capacity to meet demand
May 20, 2008: 10:50 AM EST
NEW YORK (Associated Press) - Alternative energy company Quantum Fuel Systems Technologies Worldwide Inc. said Tuesday that its German partner will boost solar module manufacturing capacity for its European systems in order to meet growing demand.
Asola Advanced and Automotive Solar Systems GmbH will lift its capacity to 45 megawatts peak power annually and will build a new plant to accommodate its growth requirements.
Quantum said it is in talks to build on its Asola partnership and announced the two companies have signed a new long-term solar cell supply agreement with Ersol Solar Energy AG. Quantum and Asola will be responsible for providing Ersol with 155 megawatts in solar cells this year.
The pact, combined with other existing agreements, is expected to provide Quantum and Asola with more than $600 million in combined sales.
Quantum holds a 25 percent stake in Asola.
Shares of Quantum rose 12 cents to $1.87 in morning trading.
Price Target =$4,5(69% up) by Briefing.com
http://www.briefing.com/GeneralContent/Active/Investor/TickerSearch/QuickSearch.aspx
LOTS of DD in this link
From Yahoo Board by lettitgosam
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_Q/threadview?m=tm&bn=25113&tid=75052&mid=75052&tof=4&frt=2
Read the Edgewater Presentation for excellent DD on QTWW
http://sec.gov/Archives/edgar/data/11663...
You can thank me later
SOUTHWEST SITE ....
http://www.southwest.com/
Yes,yes...Someday
OK let's wait
A break for a cigar and a coffee...
4k9p - Thanks for all your hard work...
It's your time....
9:04 PM in Portugal - I'm waiting...
4k9p, you have a brave heart.
Good afternoon
Be Afrraid! Verry Afrrrraiiid! It's comming.....
Yes! It's sad...
NEWS OUT!!!!!
Press Release Source: Soma Petroleum Limited
SOMA Petroleum Ltd and Actel/Aikete Limited
Monday May 12, 1:01 am ET
TORONTO, May 12 /PRNewswire-FirstCall/ - SOMA Petroleum Ltd (Trading as SA1.F, SA1.DE & SA1.BE) executives are pleased to announce the completion of a joint venture agreement between Actel/Aikete Limited and First Union Kreditanstalt S.A according to Mrs. M. J. Majoie Hui, President of Actel/Aikete, Ltd.
ADVERTISEMENT
"Our company, Actel/Aikete Limited, has been heavily investing in China, especially in a mining waste recycling facility in Dalian. The Dalian facility has a registered capital of 10.7 million US$. The facilities comprehend 5.4 million ton's of tailings, 11 accessory buildings, a 40,000 square feet 100' tall factory; with all the necessary infrastructure, such as electricity, water, roads, dams, etc...
The joint venture capital brought by SOMA will allow us to expand the facility and to install additional production lines. The principal production is precious metal oxides in semi-refined form, such as palladium, iridium, rhodium, etc...
The contract was signed at the end of March 2007 and additional details for funding are being finalized at the present time. SOMA has made multiple transfers, to date, of their total contractually committed funding in excess of three million dollars (US)."
The due diligence has been completed by SOMA and the property has received Chinese Government environmental approvals. The property is currently owned by D.A.K., a privately owned Chinese resource corporation held by H.M.H. of Hong Kong. Once the agreements are finalized and executed, SOMA will own 49% of all operations and mineral rights upon completion of funding. Significant deposits of gold, platinum, palladium, rhodium and copper have been identified in the mine and mine tailings. Monthly revenues of $1.6 million and annual revenues of $19.2 million are projected within one year of closing.
The Dalian acquisition covers the mineral rights to 220,000 square meters of land leased from the government for 25 years with 15 years remaining, with right of renewal. The property includes 5.2 million tons of mine tailings plus infrastructure in place including roads, electricity, water, fencing, storm sewer, transportation and one operating production line. To date $7 million has been invested in the project by H.M.H. and D.A.K. Once the acquisition is complete SOMA plans to increase production to three lines, within the first year. The company will utilize D.A.K.'s environmentally friendly leaching process to extract the mineral deposits.
Safe Harbor
Certain statements above may constitute forward-looking statements. Such forward- looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the companies to be materially different from any further results, performance or achievements expressed or implied by such forward-looking statements.
In additional news, Mr. Larry Skolnik, President of SOMA, is continuing to develop relationships with market makers in Europe to help create additional investor awareness of SOMA on the Frankfurt and Berlin Exchanges.
NEWS OUT!!!!!
Press Release Source: Soma Petroleum Limited
SOMA Petroleum Ltd and Actel/Aikete Limited
Monday May 12, 1:01 am ET
TORONTO, May 12 /PRNewswire-FirstCall/ - SOMA Petroleum Ltd (Trading as SA1.F, SA1.DE & SA1.BE) executives are pleased to announce the completion of a joint venture agreement between Actel/Aikete Limited and First Union Kreditanstalt S.A according to Mrs. M. J. Majoie Hui, President of Actel/Aikete, Ltd.
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"Our company, Actel/Aikete Limited, has been heavily investing in China, especially in a mining waste recycling facility in Dalian. The Dalian facility has a registered capital of 10.7 million US$. The facilities comprehend 5.4 million ton's of tailings, 11 accessory buildings, a 40,000 square feet 100' tall factory; with all the necessary infrastructure, such as electricity, water, roads, dams, etc...
The joint venture capital brought by SOMA will allow us to expand the facility and to install additional production lines. The principal production is precious metal oxides in semi-refined form, such as palladium, iridium, rhodium, etc...
The contract was signed at the end of March 2007 and additional details for funding are being finalized at the present time. SOMA has made multiple transfers, to date, of their total contractually committed funding in excess of three million dollars (US)."
The due diligence has been completed by SOMA and the property has received Chinese Government environmental approvals. The property is currently owned by D.A.K., a privately owned Chinese resource corporation held by H.M.H. of Hong Kong. Once the agreements are finalized and executed, SOMA will own 49% of all operations and mineral rights upon completion of funding. Significant deposits of gold, platinum, palladium, rhodium and copper have been identified in the mine and mine tailings. Monthly revenues of $1.6 million and annual revenues of $19.2 million are projected within one year of closing.
The Dalian acquisition covers the mineral rights to 220,000 square meters of land leased from the government for 25 years with 15 years remaining, with right of renewal. The property includes 5.2 million tons of mine tailings plus infrastructure in place including roads, electricity, water, fencing, storm sewer, transportation and one operating production line. To date $7 million has been invested in the project by H.M.H. and D.A.K. Once the acquisition is complete SOMA plans to increase production to three lines, within the first year. The company will utilize D.A.K.'s environmentally friendly leaching process to extract the mineral deposits.
Safe Harbor
Certain statements above may constitute forward-looking statements. Such forward- looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the companies to be materially different from any further results, performance or achievements expressed or implied by such forward-looking statements.
In additional news, Mr. Larry Skolnik, President of SOMA, is continuing to develop relationships with market makers in Europe to help create additional investor awareness of SOMA on the Frankfurt and Berlin Exchanges.
share price should approach $20 (2010)
http://seekingalpha.com/article/75660-china-north-east-petroleum-strong-growth-clear-visibility?source=yahoo
China North East Petroleum: Strong Growth, Clear Visibility
by: Atticvs Research posted on: May 05, 2008 | about stocks: CNEH.OB Font Size: PrintEmail
Having recently secured $15 million debenture financing, plus an additional $13 million equity warrants attached thereto, China North East Petroleum (CNEH.OB) has embarked on a path of demonstrably strong growth set to last a number of years.
Stable Business Model
CNEH possesses oil acreage with total reserves of 75m barrels of which they anticipate extracting about 35%, being approx. 26m bbls, over its useful life. As of December 31, 2007 the company had 157 oil wells and has instigated a multi-year program to boost this to 675. Substantial growth in sales and profits will come directly from this increase in well numbers. This will be complimented by CNEH using more up-to-date technologies in oil extraction, thus improving output and accelerating profitability.
Sustainable Strength
The recent $15m debenture financing, plus warrants, provides the company with sufficient cash to allow it to complete its entire drilling program by 2010 whilst maintaining strong cash balances at all times. After the drilling program is complete CNEH will generate large cash surpluses year after year.
Stable Business Model + Sustainable Strength = Strong Growth, Clear Visibility
Having already engaged the services of a well driller and commenced drilling, the combined effect of CNEH’s generous financing package plus the multi-year drilling program sets it on a path of exponential growth in sales and EPS for years 2008, 2009 and 2010 with good visibility.
Stock Price Target
Assuming an oil price of $90 for all of 2008, and using reasonably conservative forecast assumptions, CNEH’s estimated sales this year are $47.8 million with EPS of $0.70. Using an average oil price of $95 for 2009, forecast sales are $84.5 million and fully diluted EPS $1.10.
Using a p/e of 10, these EPS estimates should support a share price of $10 by late 2008 or early 2009, especially with the company committed, via pledges given under the $15 million financing package, to obtaining a Nasdaq or AMEX listing before the end of February, 2009.
Longer-term investors may take comfort in the view that a year later (end 2009/early 2010) the share price should approach $20 whilst still being moderately valued relative to 2010 EPS.
Talk to DERBENSKI....He can explain...
Sorry ... But I can, I did and I will....
Please,... ask DERBENSKI....
I expect $4.628.707,46 in sales (DERBENSKI help)
From DERBENSKI ....
http://investorshub.advfn.com/boards/read_msg.asp?Message_id=27278704&txt2find=derb
Unaudited first six months 2007 from 8K
Gross Sales $446,773
Averaged over 6 months $74,462 per month
So....and ...every month we grow up 23% (Feb/Jan)=1,23
For 2008----------------------------------------------Sales--------Evolucion
Jan Increase 30% ($74462* 1,3)----------- 96.800,60
Feb Increase 60% ($74462* 1,6)-----------119.139,20-----123%
Mar-08----------------------------------------------146.541,22-----123%
Apr-08----------------------------------------------180.245,70-----123%
May-08----------------------------------------------221.702,21-----123%
Jun-08----------------------------------------------272.693,71-----123%
Jul-08----------------------------------------------335.413,27-----123%
Aug-08----------------------------------------------412.558,32-----123%
Sep-08----------------------------------------------507.446,73-----123%
Oct-08----------------------------------------------624.159,48-----123%
Nov-08----------------------------------------------767.716,16-----123%
Dec-08----------------------------------------------944.290,88-----123%
Total-----------------------------------------------4.628.707,46
Thanks for your imput.....
Para os investidores que desejem falar em Português existe este Board:
http://investorshub.advfn.com/boards/board.asp?board_id=7513
And?.....
Well! I expect $4.628.707,46 in sales (DERBENSKI help)
From DERBENSKI ....
http://investorshub.advfn.com/boards/read_msg.asp?Message_id=27278704&txt2find=derb
Unaudited first six months 2007 from 8K
Gross Sales $446,773
Averaged over 6 months $74,462 per month
So....and ...every month we grow up 23% (Feb/Jan)=1,23
For 2008----------------------------------------------Sales--------Evolucion
Jan Increase 30% ($74462* 1,3)----------- 96.800,60
Feb Increase 60% ($74462* 1,6)-----------119.139,20-----123%
Mar-08----------------------------------------------146.541,22-----123%
Apr-08----------------------------------------------180.245,70-----123%
May-08----------------------------------------------221.702,21-----123%
Jun-08----------------------------------------------272.693,71-----123%
Jul-08----------------------------------------------335.413,27-----123%
Aug-08----------------------------------------------412.558,32-----123%
Sep-08----------------------------------------------507.446,73-----123%
Oct-08----------------------------------------------624.159,48-----123%
Nov-08----------------------------------------------767.716,16-----123%
Dec-08----------------------------------------------944.290,88-----123%
Total-----------------------------------------------4.628.707,46
Thanks for your imput.....
Sinopec plans $2.9 bln investment to upgrade plants
http://www.reuters.com/article/marketsNews/idCNTHKG18943420080424?rpc=44
CHENGDU, April 24 (Reuters) - Sinopec (0386.HK: Quote, Profile, Research) will invest 20 billion yuan ($2.9 billion) to upgrade its plants before 2010 to ensure its refined oil products meet new national standards, a company official said, paving the way for equipment suppliers to compete for orders from Asia's top refiner.
Chinese refiners have difficulty adapting to higher fuel standards because they process more and more high-sulphur and heavy crude oil, Sun Yongsheng, deputy chief engineer of Sinopec's Economic and Technology Research Institute, said in prepared remarks for the China Oil Traders' Conference.
In the meantime, they have comparatively low hydrocracking and de-sulphurising capacity, he said, adding that upgrading refining facilities and increasing hydrocracking capacity would add to refiners' financial burden and increase their demand for higher fuel prices, he said.
From the start of this year, Sinopec (600028.SS: Quote, Profile, Research)(SNP.N: Quote, Profile, Research) had begun to supply the Chinese capital with fuels that meet Euro IV standards from its Beijing plant, part of efforts by China to try to clean up the city's smoggy skies ahead of the summer Olympics.
Beijing adopted Euro III standard fuel at the end of 2005 while the rest of the country was required to meet the requirements from the beginning of 2010.
($1=6.980 Yuan)
(Reporting by Jim Bai; Editing by Anne Marie Roantree)
4K9P YOU ARE BRAVE!!! Good night
AERO - EBAY: is a PowerSeller!!!!!!!!!!
http://pages.ebay.com/services/buyandsell/welcome.html
http://myworld.ebay.com/ebaymotors/aeroturbinecompany/
What is a PowerSeller?
PowerSellers rank among the most successful sellers on eBay in terms of sales and customer satisfaction. We are proud to recognize their contributions to the success of the eBay Community!
Member is a PowerSeller This icon next to a member's user ID means that the seller meets the criteria for being a PowerSeller - consistent sales volume, 98% total positive Feedback, eBay marketplace policy compliance, an account in good financial standing, and beginning in July 2008, detailed seller rating (DSRs) of 4.5 or higher in all four DSRs - item as described, communication, shipping time, and shipping and handling charges. If a seller no longer complies with any one of the above requirements, they are removed from the program.
As a buyer, when you see this mark, you can be confident that you are transacting with an experienced eBay seller with a proven commitment to customer satisfaction.
As a seller, more than ever before, you enjoy exclusive benefits as a member of the PowerSeller Program - benefits that celebrate your success in terms of sales volume and customer satisfaction and help you grow your business. Membership is FREE. If you qualify, eBay will automatically invite you via email and My Messages.
PowerSeller Program Benefits
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* Prioritized customer service - PowerSellers receive prioritized support by email or telephone, depending on sales level.
* PowerSeller fee discounts - For listings started on or after February 20, 2008 (applied to the April 2008 invoice), as a reward for excellent customer service, PowerSellers with high detailed seller ratings (DSRs) over the past 30 days will receive discounts on Final Value Fees for their prior month's sales. Learn more about how the discounts work and, if you are a PowerSeller, check the PowerSeller fee discount section of the Seller Dashboard to see if you qualify.
* Unpaid Item protection - PowerSellers will receive a credit for any Feature Fees when a buyer does not pay for an item and the seller closes an unpaid item dispute. This program covers auction-style listings (excluding Dutch and Live Auctions) and single item fixed price listings on eBay.com, eBay.ca, eBay Express, and eBay Motors. Learn more.
* Expanded seller protection from PayPal - Items sold by PowerSellers on eBay and paid for with PayPal will be covered against claims, charge backs, reversals for unauthorized payments, and merchandise not received. Transactions must meet the terms of coverage. This protection is free to PowerSellers and eliminates the need for confirmed addresses. Expanded seller protection is now available and enrollment takes only a few moments.
* Increased visibility in Best Match searches - To reward excellent customer service, eBay will advantage the listings of the upper half of sellers in terms of buyer satisfaction. This advantage also applies to sellers outside of the PowerSeller program. Learn more.
* Exclusive networking - PowerSellers share selling strategies on a discussion board open only to members.
* Special offers - eBay works with many companies who offer products, services, and discounts available only to PowerSellers.
* PowerSeller business templates - Access to eBay - approved templates for marketing
* Powerful Giving Program - eBay Foundation regularly donates to charities supported by PowerSellers.
* And more!
4K9P THANKS :)!!! BE BRAVE!!!
4K9P - Just a few more days... and PR!!!!
AERO on EBAY - important - must read!!
http://feedback.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewFeedback2&userid=aeroturbinecompany&ftab=AllFeedback&myworld=true
up 10 %
900% !!!!!!!!!! OMG
From Last PR
1 – Agreement under the joint project
today announced that the Parties actively conduct works on the prompt end of preparation of the Agreement under the joint project.
2 – granting services by the Chinese partner on the territory of Russian Federation
We have already known, that interest of North-West Group with Sinopec, first of all, is directed on granting services by the Chinese partner on the territory of Russian Federation, at carrying out of chisel works on oil deposits which purchase is conducted.
3 - purchase of a deposit which will occur not later than in half a year
According to the signed contract, right after successful participation in the tender for purchase of a deposit which will occur not later than in half a year,
4 - will create affiliated formation
the North-West Oil company together with Sinopec will create affiliated formation, branch, on performance of a complex works on maintenance of oil and gas facility construction and pipeline laying for a wide range of surface conditions and subsurface characteristics.
5 - Sinopec Service is fully supported by the research and development institutes
Sinopec Service is fully supported by the research and development institutes of the Sinopec Group., provided directed drilling and its optimization, and also to render services on chisel solutions, cementation of chinks and the pump equipment not only for North-West Oil Group, but also to other oil companies.
6 - Sinopec International Petroleum Service Corporation (Sinopec Service) is a fully owned subsidiary of the Sinopec Group dedicated to provide international petroleum services to all major oil and gas operators.
7 - Using High-tech technology and new engineering decisions, Sinopec Service is the leader among chisel contractors of China, and gives to Customers a full volume of services on construction of chinks.
8 - If past experience is anything to go by the combination of the Russian experience and the equipment with experience of the western service companies gives optimum result, providing development of chinks by high rates and with excellent quality. We are sure that such approach will allow North-West Oil Group to successfully carry on drilling operations
9 - The goal of our company is to establish strong attitudes with the Chinese party, as with the favorable strategic partner. We understand, that active introduction of new approaches to conducting chisel works last decade is the keystone to success.
10 - Becoming of the oil-and-gas service market, in conditions of a rigid economic competition, defines necessity of regular generalization of the saved up experience, the analysis of tendencies of development of chisel technologies, knowledge of last development in the field of rock-destruction tool. These Parameters have influence on work increase and decrease in expenses for construction of chinks.
11 - Together with research, educational technical institutes, the service and research-and-production organizations we develop high technologies and introduce a new inventions.
12 - Complexity of conducting chisel works is demanded us to make an optimum choice so technologies, as the service companies to work. And our company made its choice in favor of Sinopec Service, as the company has undertaken petroleum projects, and oil and gas technical service in many countries in Africa, America, Middle East, Asia.
13 - Sinopec Service has an outstanding record in geophysical prospecting, drilling, logging, cementing, hydraulic fracturing and well workover. It has strong engineering, Procurement and Construction capability for oil and gas facilities, pipelines and civil infrastructure.
14 - Such scheme of cooperation allows to concretize the problems which we face with and operatively to find constructive decisions on the basis of last achievements of the "know-how."
15 - Cooperation with Sinopec provided service drilling, using new technologies will allow us to reduce duration of construction of a chink to 5,6 %, costs on a chink -- 9,9 %.
Well, Well, Well....
Always the same game MM....
News around the coner!!!
Be afrrrraid, verrrry afrrrraid....
The show is about to begin...Wake up!!!!
Sinopec's net rises 5.5%
http://online.wsj.com/article/SB120751847592193323.html?mod=yahoo_hs&ru=yahoo
By Aries PoonThe Wall Street Journal Asia
Word Count: 396 | Companies Featured in This Article: China Petroleum & Chemical
HONG KONG -- China Petroleum & Chemical Corp., or Sinopec, the largest refiner in Asia by capacity, said Sunday that its 2007 net profit rose 5.5%, as a government subsidy helped cushion surging oil costs.
Chairman Su Shulin said in a statement that Sinopec plans to boost crude-oil throughput 12% this year to feed the country's robust demand for fuel, even though Beijing will likely continue keeping domestic fuel prices low amid escalating inflationary pressure.
Sinopec said it increased ...
Top Asia oil refiner Sinopec Q4 dives two-thirds
http://www.reuters.com/article/marketsNews/idCNTHKF07906120080406?rpc=44
Sinopec (600028.SS: Quote, Profile, Research), which vies with PetroChina (0857.HK: Quote, Profile, Research) and CNOOC Ltd (0883.HK: Quote, Profile, Research) to fuel the world's largest oil market after the United States, reported a net profit of 6.71 billion yuan ($956.5 million) versus a slightly revised 18.82 billion yuan a year earlier.
The result lagged a consensus forecast of 12.75 billion yuan from 20 analysts polled by Reuters Estimates.
Global crude oil prices CLc1 jumped to $96 at the end of last year from $80 a barrel by the end of September, before striking an all-time high above $110 in March. High crude prices tend to favour crude oil producers while hurting refiners.
Shares in Sinopec rose 21 percent in the fourth quarter of 2007, beating PetroChina's 5.7 percent fall and a 5.2 percent drop in the index of Hong Kong-listed Chinese firms . ($1=7.015 Yuan) (Reporting by Judy Hua and Edwin Chan; editing by Anshuman Daga)
FYI - Break-even (Formulas)
In the linear Cost-Volume-Profit Analysis model, the break-even point (in terms of Unit Sales (X)) can be directly computed in terms of Total Revenue (TR) and Total Costs (TC) as:
TR =TC
P*X = TFC + V*X
P*X-V*X = TFC
P-V)*X=TFC
X=TFC/(P-V)
where:
TFC is Total Fixed Costs,
P is Unit Sale Price, and
V is Unit Variable Cost.
The Break-Even Point can alternatively be computed as the point where Contribution equals Fixed Costs.
The quantity (P- V) is of interest in its own right, and is called the Unit Contribution Margin (C): it is the marginal profit per unit, or alternatively the portion of each sale that contributes to Fixed Costs. Thus the break-even point can be more simply computed as the point where Total Contribution = Total Fixed Costs:
Total Contribution = Total Fixed Costs
Unit Contribution*Number of Units = Total Fixed Costs
Number of Units = Total Fixed Costs/Unit Contribution
In currency units (sales proceeds) to reach break-even, one can use the above calculation and multiply by Price, or equivalently use the Contribution Margin Ratio (Unit Contribution Margin over Price) to compute it as:
Break-even Point (in Sales)} = Fixed Costs/(C/P).
R=C Where R is revenue generated C is cost incurred i.e. Fixed costs + Variable Costs or Q X P(Price per unit)=FC + Q X VC(Price per unit) Q X P - Q X VC=FC Q (P-VC)=FC or Q=FC/P-VC=Break Even Point
Is PetroChina Too Cheap, or Not Cheap Enough?
http://www.thestreet.com/_yahoo/markets/worldmarkets/10408673.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Are the beleaguered shares of PetroChina (PTR - Cramer's Take - Stockpickr) too cheap, or are they just cheaper than they were for a reason?
That's the question on many investors' minds in Hong Kong and China right now, after last week's surprise softer-than-expected earnings announcement, when the company said it made 145.6 billion yuan ($20.6 billion) in 2007, just 2.3% more than in the year before.
There was a time, not that long ago, when PetroChina could do no wrong. Last year, excitement abounded about the company's potential earnings going into 2008, and it traded at a 102% premium to rival global oil giants. Between January and November, its shares and ADRs rocketed in value. However, that premium has now shrunk to around 19%, according to Graham Cunningham, an analyst at Citigroup in Hong Kong.
Since the beginning of the year, shares in Hong Kong and the New York-traded ADRs are both down 30%, while the A-shares in China have become the punchline of jokes among mainland investors, off 28% since January. Going back to November, to an ill-fated debut of the dual-listed A-shares, they have plummeted 50%.
Some even blame the Shanghai IPO for the mainland market's overall woes -- the Shanghai Composite Index has lost 32% since Nov. 5. Still, PetroChina alone is likely not to blame, considering that performance is in line with the global selloff that many other equity markets have experienced.
The latest sign of trouble came last Wednesday, when PetroChina said its earnings growth for last year was lower than that of others in the sector, and lower than analysts' estimates, because of the rising costs of materials. For most oil companies, this has not posed too much of a problem, since the price of oil has risen in line, and in some cases more so, than the price they pay for materials to refine and produce it. The big problem has been that Beijing caps the price of oil for sale in China, limiting revenue and profit margins at the retail level.
PetroChina, a publicly listed portion of China's state-owned oil conglomerate, is the nation's second-largest refiner after China Petroleum & Chemical(SNP - Cramer's Take - Stockpickr). While China Petroleum has received 12.3 billion yuan ($1.7 billion) of subsidies to offset a decline in earnings, the government has yet to extend the same offer to PetroChina.
Now, investors in Hong Kong are debating whether the beaten-down shares offer value or if they may sell off further from here.
The debate has wider implications than just for the shares of the oil company itself -- PetroChina is the sixth-largest weighting in the Hang Seng, constituting 5.4% of the index, while it is the Shanghai Composite's largest weighting, accounting for a whopping 18% of the index. As such, two of Asia's largest markets are heavily affected by buying and selling in the company.
Most traders prefer PetroChina's cousin CNOOC(CEO - Cramer's Take - Stockpickr) for similar reasons that Patrick Shultz recently outlined on TheStreet.comTV's China Watch -- high production growth and immunity to price caps. As an explorer, CNOOC is not affected as much by the resale price of oil. (CNOOC has traded in a volatile band so far this year, falling by 23% in Hong Kong.)
"While PetroChina has corrected with the H-share bubble back into reasonable territory, it doesn't stand out as exceptional value relative to global competitors in the sector," writes Citigroup's Cunningham in a recent research note. By contrast, Cunningham says CNOOC offers "outstanding value", since it has a premium of just 9% to its global competitors, and compound growth in oil and gas production of 16% a year, or a total of 56% in the last three years.
"Because of the lackluster refinery business, PetroChina does not look good now, so I don't think people will get back into the stock in a big way," says Alex Wong, a director of Ample Financial Group in Hong Kong. Wong says that until China eases the price controls on oil, equity investors should look elsewhere.
Not all market participants agree with the bearish forecasts for PetroChina, however. Peter So, head of Hong Kong and China strategy for DBS Vickers in Hong Kong, says the argument comes down to a distinction -- upstream and downstream operations. Upstream oil operations are those that focus on the production of oil, such as CNOOC, whereas downstream oil companies mostly sell it, such as Sinopec Shanghai Petrochemical(SHI - Cramer's Take - Stockpickr). Whereas upstream operators benefit from high oil prices, downstream ones suffer.
PetroChina is caught in the middle, both producing and selling oil. As such, it can hedge its bets on price hikes in black gold, benefiting from them in its production business, according to So.
"At current levels PetroChina can benefit from earnings upgrades in mid-2008. The market is pricing earnings around an average of $85 a barrel for oil, so if it's any higher, everyone will have to upgrade their earnings forecasts over the summer," says So.
Still, even if PetroChina makes more money than expected in its upstream business, growth is slow, and it is losing heavily on downstream operations, says Castor Pang, a buy side analyst for Sun Hung Kai in Hong Kong. Pang is in the CNOOC camp.
"Overall profitability for 2008 is not optimistic for PetroChina. At the moment it is not the right time to buy, because everyone seems to be switching their focus from PetroChina to CNOOC," says Pang. He does though foresee another rise in oil prices.
Whether PetroChina can convince investors that it's worth the money in a white-hot commodity bull market may depend on its powers of persuasion in Shanghai.
In that respect, PetroChina is less in control of its immediate destiny, but the company can at least take solace in the fact that it's not alone. It's becoming common to see dual-listed shares rise on the Chinese mainland, then do so in Hong Kong, and finally in New York-listed ADRs.
Lately, Asian markets have been abounding with rumors that Beijing officials are turning their attention to bolstering the falling domestic markets. The most recent of such rumors is that they will slash the stamp duty on share purchases. In that case, then, the next rally or dip of shares in the largest company in the world, by total market cap, may rest on whether or not a Chinese market rumor comes true.