Maple Leaf Green World Inc. N.MGW

Insane income - the numbers

[tbor]

The numbers as I see it.

Here they are:

Each MU can grow 200 trees.  MPE now has 1 000 000 MU (170 000 acres), that means they can grow 200 million trees.

Each tree can produce 2.5–3 kg of fruit after 3 years, and 5-7 kg after 5 years.

Each kg of fruit can yield .3 kg of oil.

Cooking oil is selling for $27.50 a kg

 So,

200 000 000 x 2.5kg = 500 000 000 kg of fruit after 3 years

200 000 000 x 5kg = 1 000 000 000 kg of fruit after 5 years

 

500 000 000 x .3 = 150 000 000 kg of oil after 3 years

1 000 000 000 x .3 = 300 000 000 kg of oil after 5 years

 

I am only going to use $20 a kg for the oil instead of $27.50 (trying to be conservative)

150 000 000 x $20 = $3 000 000 000 after 3 years

300 000 000 x $20 = $6 000 000 000  after 5 years

 

Now even though MPE is getting free land, free labour to plant the seedlings, kick backs from the Chinese Govn’t, a guaranteed monopoly in the county, subsidies and grants, special tax treatments, free water, and assistance help to build infrastructure for the plant and farm, it is still going to cost some money.  Last time I thought maybe $13 million, the project has ballooned so let’s say MPE is going to need $100 000 000 to keep their end.  The financings will obviously be done over a period of time at higher and higher share prices, but lets say the whole amount is done at $2.00, 50 000 000 shares, doubling our share base 100% dilution. 

So we are now sitting on 105 000 000 shares.

 

Here is where it gets insane:

 

After 3 years $3 000 000 000 / 105 000 000 = $28.57/share in sales

After 5 years $6 000 000 000 / 105 000 000 = $57.14/share in sales

 

It has already been established in other comparable oil plants that 40% margins are likely but lets use 30% to be conservative.

 

$28.57 x .3 = $8.57 in PROFIT after 3 years

$57.14 x .3 = $17.14 in PROFIT after 5 years

 

Now we have to pick a multiple.  Similar companies trade between 12 – 20 times earnings. (PE ratio).

 

I am going to use 10 because it is round and easy but you can pick what you like.  I am being conservative, most likely with a growth curve like you see above, MPE would trade at a premium to their peers.

 

After 3 years $8.57 x 10 = $85.70/share

After 5 years $17.14 x 10 = $171.40/share

 

The question is what are you willing to pay today to have a share go to $85 in three years and $170 after 5 years?  Do you want to pay $1 or would you $10 maybe $20?  When a venture capital firm gets a hold of these numbers, look out.  VC’s are looking for 10 baggers. I could see $5-8 in a heart beat.

Once Raymond is over in China and signs the MOU into a binding contract, this will be done by Dec 23^rd according to the last NR things will start to happen.  Jan and Feb could be very exciting.

 

Any thoughts?