Century Petroleum Corp (CYPE)

[stervc]

CYPE/Ibeto Cement $18, $36, and $54 Share Valuations…

You don’t get $850,000,000 in financing from a $25 Billion company to build a stock that you would only believe to be going to few dollars as I had indicated within the posts below:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=141104137
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=141107867

In my opinion, considering the $850,000,000 in financing obtained, the management team here is thinking much bigger, so I am going to think much bigger than a few dollars too while organizing this valuation post.

Within the post below, I explained the logic for why it’s fair to presume that CYPE/Ibeto Cement will generate in Revenues anywhere in the area of either the three amounts of $850,000,000 or $1,700,000,000 or $2,550,000,000 on an annual basis:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=141104137

I will derive valuations to consider from considering all three amounts for Revenues to be generated annually from some key fundamental variables that must be considered.


The P/E Ratio

From the consummation of the Ibeto Cement Company merging into CYPE, the stock will exist to trade within the Building Materials Industry as I had logically confirmed within the post below:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=141117919

The current Price to Earnings (P/E) Ratio is 28.83 for the Building Materials Industry as can be confirmed from the link below:

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html

The P/E Ratio is the variable that is multiplied by the Earnings Per Share (EPS) to get where a stock should fundamentally trade compared to the other stocks within its Industry or Sector. This helps to be able to better gage the ”expected growth” that is fair to perceive to exist at a certain rate. The links below should help one to better understand the P/E Ratio logic as being the growth rate to help assess the fundamental valuation of a stock for those who might be new to understanding the dynamics in greater detail:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170
http://www.investopedia.com/terms/p/price-earningsratio.asp


The Outstanding Shares (OS)

The Outstanding Shares (OS) is the variable that is used as the key denominator to assess the fundamental valuation of a stock because it is used to derive an Earnings Per Share (EPS) to multiply with a Price to Earnings (P/E) Ratio for its particular Industry to determine where a stock should trade.

The OS for CYPE is currently 271,857,024 shares as confirmed from the OTC Markets database below which was also confirmed by their Transfer Agent (TA):

https://www.otcmarkets.com/stock/CYPE/security

The Net Profit Margin (Net Income)

Another key variable that we must use to assess a fundamental valuation for CYPE is the Net Profit Margin for deriving Net Income. I will consider 20% for the Net Profit Margin based on researching the variety of margins within the post I made below and taking into consideration the magnitude of the $850,000,000 financing agreement:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=141117919

Although this variable is debatable, CYPE/Ibeto could likely have a much higher Net Profit Margin, but I will remain with what I believe to be conservative for the new CYPE and use 20% for my thoughts within this post.


Fundamental Formulas Used to Derive CYPE Per Share Valuation

Net Income ÷ Outstanding Shares (OS) = EPS

EPS x P/E Ratio = CYPE Share Price Valuation

So… finally… let’s derive some CYPE valuations…


$850,000,000 Revenues Fundamental Valuation Model

$850,000,000 Revenues x 20% (.20) Net Profit Margin = $170,000,000 Net Income

$170,000,000 Net Income ÷ 271,857,024 shares = .625 EPS

.625 x 28.83 P/E Ratio = $18.02 per share

This means that CYPE should fundamentally trade somewhere within the area of $18.02 per share based on this valuation model.


$1,700,000,000 Revenues Fundamental Valuation Model

$1,700,000,000 Revenues x 20% (.20) Net Profit Margin = $340,000,000 Net Income

$340,000,000 Net Income ÷ 271,857,024 shares = $1.25 EPS

$1.25 x 28.83 P/E Ratio = $36.04 per share

This means that CYPE should fundamentally trade somewhere within the area of $36.04 per share based on this valuation model.


$2,550,000,000 Revenues Fundamental Valuation Model

$2,550,000,000 Revenues x 20% (.20) Net Profit Margin = $510,000,000 Net Income

$510,000,000 Net Income ÷ 271,857,024 shares = $1.88 EPS

$1.88 x 28.83 P/E Ratio = $54.20 per share

This means that CYPE should fundamentally trade somewhere within the area of $54.20 per share based on this valuation model.


Please use the Substitution Property and make any change to any variable to make such thoughts make sense to your liking. Respectfully, this post is not the gospel and is only to be used as a frame to have to be able to help paint your own picture for what makes sense to you. The above thoughts are what makes sense to me.

v/r
Sterling