Nawar Alsaadi

'Up Listed Chinese Companies: Above Average Returns

Danny, NEP remains newly listed, I believe it would take sometime to build a stable and wider shareholder base, meanwhile the relatively small float and the interest by short term traders in Chinese is adding to the volatility, which actually seems to be a plus right now, since it is offering liquidity for the long term shareholders to take a position.

As for the dilution, most of the dilution is tied to the warrants placed in February 2008, which are in the money now (thus included in the diluted share count), in my last conversation with management I pressed on the issue of not issuing more “warrants” to fund growth since the shares are undervalued, they do seem to be in accordance with this point, being a major exchange listed today reduces the need for the company to entice backers with very discounted shares or warrants to gain access to capital, I believe as we move forward share issuance will be tied to accretive growth only (even thought the warrants and debt financing in 2008 was also accretive).

I believe that NEP shares remain extremely undervalued, based on the value of the reserves in the ground (deals in Jilin were valued at $19/$20 a barrel in the ground), and based on the valuation of peers in the industry, NEP should trade at a minimum of $10 a share to trade at fair value.

Regards,
Nawar

On Sep 02 11:10 AM Danny Furman wrote:

> Thanks Nawar, after rereading more closely I understand that you
> mentioned several companies to show appreciation rather than value.
> With regards to NEP, are you concerned with how the stock performs?:
> Lots of shorting given the valuation. To me it looks like aggressive
> accumulation, shorting any signs of weakness to take out stop losses.
> On the other hand, it seems possible that shares are being added
> and dilution will continue until the valuation is no longer favorable.
> My inclination is towards the former (seekingalpha.com/artic...),
> but I'd really appreciate your thoughts as you are more experienced.

'Up Listed Chinese Companies: Above Average Returns

Danny, there is a dozen of Chinese companies that have listed recently and many more are ready to list, my goal was not to have a comprehensive list of all such companies, but to highlight the appreciation potential of those stocks, I believe the point was made with the chosen sample.

Regards,
Nawar


On Sep 01 11:57 AM Danny Furman wrote:

> I'm surprised not to see CBEH and SKBI listed here.