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Lizhan (LZEN) IPO -- low P/E multiple, will sales growth continue?

|Includes: Lizhan Environmental Corporation (LZEN)
Nov 15wk IPO calendar

Lizhan Environmental (NASDAQ:LZEN) $10mm IPO
with a market cap of $72 at the price range mid-point of $5.50

LZEN Valuation Metrics

CONCLUSION
. Worth watching to see if the profitable, geometric sales increases can reoccur
. Been in operation since 2008
. For the nine months ended September 30, 2010 sales grew to 218% to $35mm from $16mm in the year earlier period
. Gross profit of 25% suggests relatively low proprietary value added

BUSINESS
. Makes synthetic leather and other fabrics from recycled leather waste
. Sells products to furniture, automotive upholstery and garment manufacturers, as well as fabric distributors.
24% of revenues from export sales

COMPETITION
The synthetic fabric industry in China is very large and fragmented.

INTELLECTUAL PROPERTY
Five design patents and three new utility model patents

USE OF PROCEEDS
$8.5mm
Installation of three production lines (production lines 2, 3 and 4) in the Evergreen Product facility that LZEN is in the process of completing.

LZEN Valuation Metrics