Diego Stendardo

China Natural Gas: Deeply Undervalued

This simple tool is NOT what i used , but it gives you an idea

www.gurufocus.com/fair...

I used the following parameters:

EPS $0.86 (Year 2009)
Growth rate in the next 5 years = 15% (very conservative)
Terminal Growth Rate = 5% (very conservative!)
Discount rate = 11%
Book Value = $5


On Sep 24 03:50 AM sorsorday wrote:

> "A simple discounted cash flow valuation with a very conservative
> earnings growth of just 15% per year for the next five years and
> an 11% discount rate, returns a fair value of $19 - $20 per share."
>
>
> I have no idea how your math works. Can you show how five years of
> earning (eps 0.86?) give a value of $19-20???

China Natural Gas: Deeply Undervalued

You judge a company only by the dividends paid? Is that all that matters to you? Great, just buy some REITs and bonds etfs and be happy with your 6% pretax yield / CHNG is a growth energy company, not an utility, and obviously is not paying dividends in its corporate infancy / investors in CHNG are in for the long term / Microsoft paid its first dividend in 2003, after 17 years as a public company; Berkshire has never paid a dividend in its corporate history; based on their dividend policy i bet you might have considered them bad investments 20 years ago, yet investors in those companies in the 80s are now millionaires. Good luck with your dividend strategy

China Natural Gas Plans to Raise More Capital for Possible Expansion

Touchè ! :-)