ORLANDO, Fla., Feb. 7, 2007 (PRIME NEWSWIRE) -- RedChip Independent, a division of RedChip Companies, announced today that it has initiated research on New Oriental Energy & Chemical Corp. (OTCBB:NOEC).
Jin Xing, MBA, CFA Level I Candidate, RedChip Research Analyst, wrote in the report:
"After meeting with NOEC's management team, we are impressed with their vision for the company and their thorough understanding of the industry. We believe that NOEC is well-positioned to benefit from the favorable trend in its core business (fertilizers) while capitalizing on the growing opportunity of the alternative fuel market.
"We believe that NOEC is attractively valued in relation to the industry average. Since the company operates in two industries, we believe that it is more appropriate to use the average of the figure derived from the agricultural chemical industry and specialty chemical industry as the basis for our valuation. The company is embarking on several large investment projects to expand its production capacity while developing new alternative fuels similar to DME and methanol. NOEC is already in the process of developing biodiesel and expects to add 300,000 tons of annual production to its product mix in the next three years. On the basis of the favorable market outlook and the company's aggressive expansion strategy, we expect that its revenue will grow at an annually compounded rate of 50.31% for the next two years. We expect that earnings will grow at an annually compounded rate of 57.81% in the same period. On the basis of the company's potential for growth, we generate a 12-month target price of $8.75, which translates into a forward P/E of 20.8x projected earnings for FY07."
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RedChip Independent Research Disclosure
The analysts contributing to this report do not hold any shares of NOEC. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the analysts' personal views as to the subject securities and issuers. RedChip certifies that no part of the analysts' compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. As such, the report should not be construed as advice designed to meet the particular investment needs of any investor. NOEC is not a client of RedChip Companies, or any of its affiliates.