Mgmt is working hard to dispel the notion that the high level of profitability can't be real. They are giving the ammo for fundamental investors to construct line-item financial models that can validate the current revenue/profitability.
The next step would be to announce a value-accreting action such as a buyback or a dividend (or a combination of both) that would convey a belief that shares are undervalued and that they will take appropriate steps to utilize their growing cash balance to the highest value-accruing purpose. After all, they are by far the biggest shareholders and serve to benefit most from these actions.
The third and ultimately greatest value-accruing step would be for mgmt to continue its strong operating results and allocate internal resources and growth to the optimal business lines/areas. This can include increasing exposure to the high-margin airport business (as they have done in early Q4), developing strategic partnerships, and potentially growing market share by signing more bus contracts and/or acquisitions.
During the four months I have owned shares, management has continued to impress me with their actions. For a small market cap company based in China they are working hard to increase business value and shareholder value - a dividend/buyback announcement would solidify their understanding of the current situation. In today's market I see no company with such an attractive combination of a strong business model, significant demographic/fundamental advantages, strong growth, and unbelieveably low valuation. Its a simple as that and other value-minded investors are bound to discover this in the coming weeks and months. This is the cheapest stock in the market today given its growth prospects and the strength of its business model.
AI
