valuation, page-4

Ripper, apologies for a belated response.

CIY is their very own worst enemy! Their announcements often (usually!) contain either unexplained, or confusing statements, or poorly constructed descriptions of their current activities that shareholders, or maybe more importantly potential shareholders, are expected to grasp and understand. It's a pathetic form of communication and public relations that makes shareholders hearts very heavy after 2 years of dismal shareprice performance and numerous pledges by the board that they will work hard to improve the image and recognition (ie.shareprice) of the company. Your understanding of the announcement is how the majority would interpret it, yet further "releases" contradict it.

Starting from a very low base of FUM on listing, their continual profit growth prove they are experts at property deals and financing, but why they don't hire decent PR people to improve their image is a mystery because the company deserves more recognition than their previous and current PR (recently new by the way) seems capable of. Unanswered queries, contradictory replies to that which were publicly announced, broker roadshow and analyst presentation that has failed to produce one broker report as yet, is dismal to say the least. It's a good company going begging for recognition and a fair rating by the market after a debilitating interference by ASIC.

The company itself seems honestly run with a good board and excellent management looking after both their investors (high interest returns) and their shareholders (by way of excellent dividends) but both willing to suffer extremely poor PR. Don't ask me why when other comparable companies that are far less profitable are running much higher PE's.

Directly on your questions, the announcement seemed to limit profit to as you said (see above complaints), but since then, they have done an analyst presentaion that stated profit is to increae by 20% to $75m in 07, which is approx. $0.57 eps. A PE of at least 12-15 is reasonable to expect for a well run diversified financial growth company which CIY is, so based on 07 earnings of $0.57, I would expect to see a shareprice of $6.80 or better within the next 12 months- providing their forecast is on target. Upside is a price over $8.50. Currently, say on a forward PE of 10, we should be seeing a price of $5.70 now, that is, if the PR let everyone know their forecast!
Even if PR remains the same as now, the price should still manage somewhere north of the current $4.60 leading up to their 07 results. Based on their 07 forecast, the current PE is 8.

My estimate is that CIY will probably pay slightly more than the $0.45 dividend this year, let alone next, and EPS in 08 should be around $0.65-.70 with a div of $0.50.
I could be wrong but I bet I am closer than what that silly announcement implied.