China Growth Stocks

[derek2000]

LTUS - LTUS had a really fantastic Q1. Nice revenue, earning, and EPS growth. Much better cash position relative to end of '09. The only negative was the tight cash flow due to the investment for its state of art headquarter.

Today's the PR says that company has sufficient working capital and growth capital to carry out the construction and outfitting of its new building complex in Beijing. I read this as a sign that the company is on its way resolving its cash flow issue.

At a reasonably optimistic scenario, the company will continue to execute over the next two quarters and fix its working capital issue. With a EPS of 0.4, a 12x multiple is highly probable due to its high growth and market position. We are looking at a target price of $4.8, a five bagger based on the PPS this morning.

Even a 6-multiple will give a target price of $2.4.