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Asia Cork: A High Risk Value Proposition

Asia Cork (OTC:AKRK) filed its 2009 10Q last night.

  • Revenues decreased 5.7% to 6,003,271
  • GAAP earnings per share increased 50% to $0.03
  • Geo calculated tax-adjusted GAAP trailing earnings per share: $0.06
  • Tax-adjusted trailing P/E: 3.7
  • Geo calculated book value per share: $0.56

Asia Cork may offer a compelling opportunity to value investors since the stock is selling at a discount to its book value per share. 

Comments in its 10Q are also encouraging.

Entering the second quarter of 2009, our business gradually revived as the market recovered.  We expect a continued revival of our business and growth in our revenue during the balance of 2009.

However, there is an outstanding liquidity issue that may temper investor enthusiasm:

"At the present time we do not have sufficient cash or cash equivalents to repay promissory notes should the investors demand payment upon maturity. The Company is seeking an extension of the maturity dates of the promissory notes and alternate financing, but there is no assurance the extension or the alternate financing will be obtained."

The GeoTeam® will take a small position in AKRK, recognizing that there is a high risk for a dilutive event to rectify the current liquidity situation, at which time it would qualify as a GeoSpecial.

Source: SEC form 10Q (QUARTERLY PERIOD ENDED June 30, 2009)

Source: GeoInvesting.com


Disclosure: Long AKRK.OB