Dragon International Group Corp (fka DRGG)

[JimProfit]

Market News First Issues the Full Analyst Report on Dragon International Group Corp. on MN1.com
Wednesday July 12, 8:30 am ET

DALLAS, TX--(MARKET WIRE)--Jul 12, 2006 -- Market News First has issued a full analyst report on Dragon International Group Corp. (OTC BB:DRGG.OB - News) with a buy rating by Michael A. Willingham.

Here are some excerpts from the report. Log on to www.MN1.com for the complete analyst report.

INVESTMENT HIGHLIGHTS
-- DRGG is a leader in China Mainland in the manufacturing and
distributing of packaging materials and specialty paper products.
-- The products produced by DRGG span many segments of business in China
such as cigarettes, cosmetics, alcohol, and pharmaceuticals, which all need
to be packaged with materials supplied by companies like Dragon
International.
-- DRGG operates in China through one wholly owned subsidiary, Anxin,
which itself is the head of four separate divisions including Paper
Products, Special Paper Products, Paper Manufacturing, and a Research &
Development Center.
-- The company is a major distributor of products manufactured by
industry behemoths International Paper and Asia Pulp & Paper Company.
-- Since going public in late 2004, DRGG has been keen on consolidating
interests in the industry to enable a strong grip on the industry from many
angles.

In summary, DRGG has many connections in the industry and has a renewed focus on translating its top line growth into profitability for the shareholders. By cutting costs and continuing to look for cheaper supply lines, the company will soon be back to net profitability. Add to this a move into segments of the market with built-in higher margins and you've got a powerhouse in DRGG. Currently generating revenues of near $18,000,000 with two straight years of 50% increases makes for a strong candidate for price appreciation.

I have looked at some of the larger and well-known names in this industry and compiled some metrics compared to DRGG. They are as follows:

Kimbery Clark, International Paper, and Avery Dennision are some of the largest companies in the industry and as such their growth rates aren't all that great. In the world of investing based upon technicals, the estimated growth rate is the great equilizer. In this scenario, DRGG expects growth in profitablility of 100% to 120% while the big three shown above range from 4.27% to 11.04%. Driven by some of the metrics above, I've calculated some possible pricing scenarios for DRGG detailed below.

Examining the Forward Price-to-Earnings model, the Avg of 3 shows 15.75x while DRGG shows only 3.4X. Applying the Avg of 3 figure to DRGG and assuming the stock is currently deserving of a higher ratio, the price should be closer to $0.75. Then looking at the Price-to-Book ratio for Avg of 3 is 3.64 and DRGG is 1.7, the same philosophy yields a valuation for DRGG of $0.35. Finally, using the Price-to-Earnings-to-Growth figures the wheels come of a little. Avg of 3 shows 2.53x as the PEG and DRGG shows only 0.0283 due to the high expected growth rate from the company management. Applying the same math a fair value of DRGG is calculated to be $14.54 per share.

In addition gave Market News First an exclusive Interview (This interview can be downloaded directly from MN1.com). Mike the analyst is working on a profile for this company that will be featured on MN1.com as of Monday July 10, 2006.

Dragon International Group Corp. manufactures packaging products used primarily for cigarettes, alcohol, gift, cosmetics, tea, and the pharmaceutical industries. The company is a distributor of Federal SBS manufactured by International Paper Co. and Hang Kong CCB manufactured by Asia Pulp and Paper Co.

About MN1.com

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Source: Dragon International Group Corp.