Renewable Energy Trade Board Corporation (EBOD), a fast growing clean energy group in China which provides solar energy products and solutions to the global market under the "LSP" brand, looks set to shine with renewed growth in the Chinese solar power market.
Formerly known as China Technology Development Group Corporation, the Company recently implemented a name change and 1:10 reverse stock split. Post-split, the Company has 2,249,854 shares outstanding and 1,429,873 shares in the float. The Company's stock has traded in a 52 week range of $1.60-$10.60. The Company is currently trading at a Price/Sales ratio of 0.44, Price/Book of 0.49 and sales growth of 20% since 2010.
From the Company's latest Securities and Exchange Commission filings, the Company list cash assets of $3.53 million against obligations of $580,000 for a net cash position of $2.9 million or $1.29 per share. On November 28, 2012, Renewable Energy Trade Board Corporation announced the sale of certain assets of its wholly owned subsidiary China Green Holdings Limited. In the transaction, China Green Holdings Limited will dispose of its entire interest in China Merchants New Energy Holdings Limited in return it expects to receive HK199,870,000 ($31,725,396) as consideration of the entire sale of its asset.
Over the past two weeks, First Solar, Inc. (FSLR) and SunPower Corp (SPWR), the two largest photovoltaic manufacturers, announced they were expanding in China's booming solar market. Chinese manufacturers dominate the global photovoltaic industry, making up eight of the top 10 panel companies by capacity last year, according to Bloomberg New Energy Finance. China is expected to install at least 3,980 megawatts of solar panels next year, according to New Energy Finance, vaulting it past Germany and Italy, the top two markets this year.
In recent weeks, Wall Street has rekindled its love for microcap Chinese companies, evidenced by the move in the stocks of China HGS Real Estate (HGSH) from $0.50 to $4.50 and that of Cleantech Solutions International, Inc. (CLNT) from $2.70 to $5.42.
We find EBOD trading at an inherent discount to its Chinese competitors when comparing Price to Sales, net cash per share and potential future growth. Our short-term target (< 90 days) is $3.70 which is the price EBOD was trading at on day one post-reverse. Our long-term price target is $4.60. At a price of $4.60, EBOD would be trading at 1 x current sales. With a float of less than 2.0 million shares, the upside can be quick and parabolic so we warn investors not to chase the stock at levels above our targets.
Disclosure: I am long EBOD.