Just some back of the envelope calcs...In 2005, sales revenue...

Just some back of the envelope calcs...

In 2005, sales revenue was 9.9m made up of 6.1m (61%) services & 3.8m (39%) product. Operating expenses were 18.8m; Loss was 11.5m

In 2006, sales revenue was 15.4m made up of 8.5m (55%) services & 6.9m (45%) product. Operating expenses were reduced to 16.3m; Loss was 0.6m

In the AGM presentation, ITE have said they are targeting a sales mix of 40% services & 60% product.

Therefore, if services increase by 30% (they increased by 37% last year) to 11m & that makes up 40% of sales, then product sales will be 16.5m

Further, if operating expenses stay the same at 16.3m (they reduced last year by 16%), then profit (assuming no tax) could be in the region of 11m + 16.5m - 16.3m = 11.2m

This would give a PE of 36/11.2 = 3.2

If ITE did achieve this sort of profit, then I think we could expect a PE of at least around 15-20, therefore a price increase of 4-6 times from where we are now.

Anyone else come up with anything similar?

Am I being too optimistic?

Btw, I'm not an advisor; this is not advice; so DYOR.