Valuing JBZY.... When it comes to startup compa
Post# of 4081
(Total Views: 14354)
Posted On: 01/14/2018 7:46:35 PM
Valuing JBZY....
When it comes to startup companies there is often confusion in valuations. Add to that the hype over some companies and total lack of interest in others and a realistic 'potential' valuation is hard to arrive at... In addition many try to use a P/E (Price to Earnings ratio) on companies, like Tesla, for example, that have not turned a profit in 10+ years... So, how does one go about valuating a company and putting a 'potential' price tag on their stock?... Meet the P/S (Price to Sales Ratio) Now, even this can be all over the map for companies involved in similar activities.
As is evidenced in the following comparison...
Tesla (TSLA on Yahoo): Price/Sales (ttm) 5.25
https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA
Changan(000625:CH on Bloomberg): Price to Sales Ratio 0.8519
https://www.bloomberg.com/quote/000625:CH
BYD (BYDDF on Yahoo): Price/Sales (ttm) 1.45
https://finance.yahoo.com/quote/BYDDF/key-statistics?p=BYDDF
But, given a few key numbers, arrived at by the incredible Due Diligence brought to us by our Investigative Gurus, we can begin to get a picture of where we could be in a year or two...
First: We have been informed by company contacts that at least 4,000 cars were sold as of months ago. and as per the company's Wechat page inventory currently (since that time) has sold out...
Second: We know that we have 2 manufacturing facilities online and producing cars now, Long Star Shandong site, and Guigang sites Each with a capacity of 300,000 vehicles.
Third: Within the next 12 months we expect to see 4 more facilities come online, giving us an approximately 800,000 vehicle per year capacity. Here's just one: http://www.21cnev.com/html/201709/776546_1.html
So, lets try to figure out where we can start to valuate JBZY...
If we take the number of cars in the total capacity and use the lower conservative figure of 600,000 vehicles, and estimate only $5,000/vehicle,... we come up with sales of $3 billion/year... So, a realistic Price/Sales of 1:1 would put us at ($3,000,000,000 in sales/846,000,000 Shares Outstanding
$3.55 roughly
But what about Tesla, and Changan and BYD? We have to account for over head and expenses of doing business, traditionally, to arrive at EBITDA (Earnings Before Interest, Taxes, Depreciation and Ammortization) And, since these are unknowns with this brand new company, we are stuck, again, using an estimate. Let's estimate a .25 profit margin so, $5,000 * .25 = $1250
So, how much do car makers make in profits per car?
http://www.caradvice.com.au/1418/how-much-do-...-each-car/
Again, the numbers are all over the map, but using my example, above, we hit very close to a conservative number across the spectrum...
So, let's take that 600,000 vehicle capacity and multiply it times only $1250/ profit per car...
600,000 vehicles X $1250 profit per vehicle= $750,000,000 earnings/year Divided by 846,000,000 shares outstanding $0.8865 earnings per share...
Now, we all know that earnings per share is not set at a 1:1 ration and this is where the Price:Earnings multiple comes in... I won't even attempt to value us at Tesla's ratio... Let's just take a normal stock valuation of P/E of 20... that gets us to $17.73/share...
Now, we all know that stock prices are based on a number of assumptions and predictions and that is how Tesla gets to its ridiculous ratios and if JBZY can execute even 1/10 as well as they seem to be doing, we MAY get to TSLA like valuations... or maybe four times the $17.73/share or $70.92/share in just a couple of years...
NOTE: none of the above takes into consideration anything but Electric Vehicle sales potential. It does not consider Bus Ad Revenue, nor Swap Station or Charging pile revenue, nor does it even consider Commercial vehicle sales such as Police Cars, Taxis, Delivery Trucks or Vans...
jymshoe
When it comes to startup companies there is often confusion in valuations. Add to that the hype over some companies and total lack of interest in others and a realistic 'potential' valuation is hard to arrive at... In addition many try to use a P/E (Price to Earnings ratio) on companies, like Tesla, for example, that have not turned a profit in 10+ years... So, how does one go about valuating a company and putting a 'potential' price tag on their stock?... Meet the P/S (Price to Sales Ratio) Now, even this can be all over the map for companies involved in similar activities.
As is evidenced in the following comparison...
Tesla (TSLA on Yahoo): Price/Sales (ttm) 5.25
https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA
Changan(000625:CH on Bloomberg): Price to Sales Ratio 0.8519
https://www.bloomberg.com/quote/000625:CH
BYD (BYDDF on Yahoo): Price/Sales (ttm) 1.45
https://finance.yahoo.com/quote/BYDDF/key-statistics?p=BYDDF
But, given a few key numbers, arrived at by the incredible Due Diligence brought to us by our Investigative Gurus, we can begin to get a picture of where we could be in a year or two...
First: We have been informed by company contacts that at least 4,000 cars were sold as of months ago. and as per the company's Wechat page inventory currently (since that time) has sold out...
Second: We know that we have 2 manufacturing facilities online and producing cars now, Long Star Shandong site, and Guigang sites Each with a capacity of 300,000 vehicles.
Third: Within the next 12 months we expect to see 4 more facilities come online, giving us an approximately 800,000 vehicle per year capacity. Here's just one: http://www.21cnev.com/html/201709/776546_1.html
So, lets try to figure out where we can start to valuate JBZY...
If we take the number of cars in the total capacity and use the lower conservative figure of 600,000 vehicles, and estimate only $5,000/vehicle,... we come up with sales of $3 billion/year... So, a realistic Price/Sales of 1:1 would put us at ($3,000,000,000 in sales/846,000,000 Shares Outstanding
$3.55 roughly But what about Tesla, and Changan and BYD? We have to account for over head and expenses of doing business, traditionally, to arrive at EBITDA (Earnings Before Interest, Taxes, Depreciation and Ammortization) And, since these are unknowns with this brand new company, we are stuck, again, using an estimate. Let's estimate a .25 profit margin so, $5,000 * .25 = $1250
So, how much do car makers make in profits per car?
http://www.caradvice.com.au/1418/how-much-do-...-each-car/
Again, the numbers are all over the map, but using my example, above, we hit very close to a conservative number across the spectrum...
So, let's take that 600,000 vehicle capacity and multiply it times only $1250/ profit per car...
600,000 vehicles X $1250 profit per vehicle= $750,000,000 earnings/year Divided by 846,000,000 shares outstanding $0.8865 earnings per share...
Now, we all know that earnings per share is not set at a 1:1 ration and this is where the Price:Earnings multiple comes in... I won't even attempt to value us at Tesla's ratio... Let's just take a normal stock valuation of P/E of 20... that gets us to $17.73/share...
Now, we all know that stock prices are based on a number of assumptions and predictions and that is how Tesla gets to its ridiculous ratios and if JBZY can execute even 1/10 as well as they seem to be doing, we MAY get to TSLA like valuations... or maybe four times the $17.73/share or $70.92/share in just a couple of years...
NOTE: none of the above takes into consideration anything but Electric Vehicle sales potential. It does not consider Bus Ad Revenue, nor Swap Station or Charging pile revenue, nor does it even consider Commercial vehicle sales such as Police Cars, Taxis, Delivery Trucks or Vans...
jymshoe
(30)
(1)