China Growth Stocks

[GorillaGorilla]

CNAM - interesting announcement - as it boosts core earnings while we await for ramping up of the recycle facility.

Contract

Rev 180 M
Contract time 16 Months
Months in year left 9 Months
Rev in 2010 101 M
Margin 6% (From memory Glenn had interview that suggest this was higher but keep it here for now)
Income 6 M (Compare to their core net income in 2009 of between 4.5 and 5 M)

EPS booster for remainder of year $0.41
EPS booster per quarter $0.14


CNAM seems to have chunky orders - so it just feels like another one of those all be it a huge chunk. The company had a net income of around 5M in 2009 but this is 6M in 2010 alone. Without knowing how much these chunks make usually (my ignornace) my guess is 9M - 11M is quite possible from the core this year, so $0.61 - 0.74 - (once again emphasising that's a guess without knowledge of chukyness per year!).

Sooooo, a great announcment but I don't know if the core business is going to grow or not. Compare this to the sismic sea change in the company after the previous announcement. That said it's will harden the company's Q2 and Q3 as we await full capacity run rate in Q4.

rich