Google and global warming, page-26

Hi Ed
Each of us will have different strategies in our investments. For years I invested in mainly blue chips with a couple of spec thrown in. I received dividends but wasn't getting the capital growth I wanted so a few years ago sold out of all the blue chips and put the lot into Phk. I understand the need to watch P/e and yields but I find most stocks on good p/e will deliver limited capital growth they are what you might term a mature stock with very limited upside. Phk yes is trading on a high p/e but the upside could be huge.

On the contracts , this is my take. Phk are as such working as a subcontractor to our partners. To me we are coming in towards a end of a project and putting some finishing touches on the bigger project. Ie this canal project we are only doing a section, from listening to the LF interview our partners are working up stream I would say doing engineering work to stop the flow of waste water entrying the canal and then we are cleaning up what's already in the canal. To me i would say our partner have already won the bigger contracts we are just waiting for them to do their part first before we start our section. This can help explain why the timing on some of our starts might vary and be pushed back a couple of months as the first part of the contract being done by our partners might be taking longer.
We are entrying this fy with $10 to $12m work already under way but if you look at the half yearly report they was expecting another $15 to come though for last year, this being $10m for the wet lands ( that was the value of the project at that time) plus another $5 contract. So this $5m contract still to come. I believe i read somewhere around mid year. Personally I would be surprised if already started. I say this for 2 reasons, helps explain the need for capital and also I don't think the company is not making a announcement each time they start something in china look at the wetlands project was there a special announcement when this one started , no just included in the last quarterly report they had started, also apart form the canal and wetlands projects they had other contracts of$1.3m in china no details released that has been done so might not be getting special announcement on each contract. On the canal project I don't believe the second stage not going ahead, just the first stage has taken longer than first thought, second stage still to come after the first stage completed, plus the maintenance side of the contract, so probably another $5m from this one. So I'm still going with over $20 from what we have been told. If you look at the last quarterly the company said they are working on several large projects which will count as sales this colander year so more still coming. Looking at the value of this china contracts I would suggest when the company is saying large it most likely will be over the $5m mark and there a several of these..so that might be about $30m out of china without adding in any more that might come along. We have also got these framed agreements sitting in the background, the company has been approached by other companies a agreement has been reached to supply a certain quantity of product at a fixed price, not to sure is any orders have been placed yet. Then we have the rest of the world.

Hopefully might get more insight from the quarterly but if we look at over the last month or so we have seen 5 more jobs advertised which would suggest they are still expanding with a large work load in front of them.

Thanks
Mickem