China JV5 Feb 2011 15:33
The CEO paying over £2m for stock at 20.5p is either daft or extremely shrewd.
If I had that sort of money to place somewhere it wouldn't be where I already had a high exposure UNLESS the risk was non-existent and the returns made it worthwhile...
SO we know TNCI have bagged more t/o in the last 6 months than the last 18mths combined, they have been in JV talks with some of China's largest industrial groups and have been involved in state funded bio-degradable plastic programmes.
One of the above must be about to come off big style imho, if CEO is prepared to pay 20.5p I reckon he will at least want a return of 50% pretty sharpish imho taking us to 30p, BUT the market wouldn't let a CEO dump loads at that price, for him to exit at 30p the sp. would have to be minimum 40p imho.
This would give a m. cap of about £20m (or a PE of 10 based on £2m profits p.a), achievable on current workload imho,this is without any value associated to any new JV.
You can now see why CEO was happy to pay 20.5p, I will be continuing to add until JV news breaks and am a buyer up to 25p.
off to have a further look at these bio-degradable programmes.