EV/EBIT valuationCFY current price:
EV: At $65M market cap plus $12.2M net debt, the EV is $77.2M.
TTM EBIT = $10M net income + $5.6M (Tax + Interest) = $15.6M CAD
EV/EBIT = $77.2/$15.6 = 4.9x
P/E = $65M/$10 = 6.5x
P/B = 1.1
P/S = 0.7x
P/FCF = N/A
Chinese Green & Renewable Energy
Number of firms = 17
EV/EBIT = 19.2x
Current PE = 119.80
Trailing PE = 42.50
Forward PE = 13.23
Expected Growth next 5 years = 22.80%
PEG Ratio = 0.75
Chinese Oil and Gas Distribution
Number of firms = 8
EV/EBIT = 26.3x
Current PE = 64.15
Trailing PE = 40.76
Forward PE = 23.49
Expected Growth next 5 years = 18.90%
PEG Ratio = 1.32
Example of a Chinese Comparable
ENN Energy
Market Cap = $14.8B CAD
ROE = 17.65%
EV/EBIT: 24.5x
P/E = 20x
P/B = 3.44x
P/S = 2.16x
Using 15x EV/EBIT:
EV/EBIT = (Market Cap + Debt)/EBIT
15x= (Market Cap + 12.2)/15.6
Market Cap = $221.8M CAD or $3.41 CAD/share
An EV/EBIT of 20x would yield $4.61 CAD/share
An EV/EBIT of 25x would yield $5.81 CAD/share
This doesn't include the earnings from the Smart Energy Project or any growth next year, solely the TTM performance of CFY.
I would love the market price to be realized sooner than later, but I have more shares to buy. If that doesn't happen, I'll continue to buy many more over the years. I'm 35, so I assume before I die (hopefully no sooner than 60 more years) CFY will be fairly priced at some point. Whenever that happens, it will provide a satisfactory return.