Maxsoar Updates Coverage of Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) ("Longwei" or the "Company") with Rating of Outperform; Raises Fair Value Assessment to $5.18 - $5.87
Longwei Petroleum Investment Holding Ltd increases sales by 6% according to Maxsoar Financial and Investment LLC
Cerritos, CA -- (SBWire) -- 10/10/2012 --Longwei is a large-scale wholesaler and distributor of gasoline, diesel, and other oil products in China with national wholesale and distribution licenses for petroleum products. The company owns 220,000 tons of oil storage capacity after recently completed acquisition of a large oil storage facility. The main customers of Longwei are coal mining companies, power supply plants, manufacturers, and retail diesel and gasoline stations in Shanxi Province.
"During FY2012, the Company’s sales increased 6% compared to FY2011. Adjusted net income and EPS decreased by approximately 8%, primarily due to the increase of the weighted average purchase price for oil products associated with the international oil price fluctuations," the analysts said, "The Company is attractive to investors because it kept its return on assets (ROA) and return on equity (ROE) at approximately 20%. The major catalyst for future stock price appreciation is the completion of the acquisition of Huajie facility, which at full capacity will double the Company’s capacity and generate $300 million in revenue and $30 million in net income per annum."
The analysts concluded, "based on our valuation, the fair value of Longwei’s stock price per share is $5.67 based on an intrinsic valuation and the range is $5.18–$5.87 based on comparable company analyses with American large-cap comparable companies and Chinese/Asian small-cap comparable companies. This indicates that the current market price of Longwei’s stock is significantly undervalued, as the potential price upside is over 200%."
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DISCLAIMER: This is a buy-side sponsored research report. MaxSoar Financial and Investments LLC (MaxSoar) received $3,000 from three private investors to write this update report for Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) ("Longwei" or the "Company"). Neither MaxSoar nor its analysts are paid directly or indirectly by Longwei, its investor relations company, or any other related entities of Longwei to write this report.
The analyses and fair value assessment contained in this report represent only the analysts’ personal views and opinions. The fair value assessment is by no means a guarantee of performance on any long or short trades of the stock and is not a recommendation to buy or sell the stock. Investors should not make their investment decisions based solely on the information and opinions contained in this report. Every investment—no matter how compellingly appealing—involves risk. Investors should do their own due diligence and consider personal risk tolerance, preferences, and needs when making an investment or a trading decision.
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